Will RERA boost the demand for affordable housing?
The uncertain times that plagued the real-estate sector over the last two years is passé. Affordable housing, which was the only sector that gained in 2017, is now the pivotal force that is driving real-estate. We take a look at how RERA or the Real Estate Regulatory Act affects this sector.
Focus on affordable housing
The jitters of demonetization followed by the uncertainties post the implementation of GST and RERA had resulted in a slump for the real estate sector. New projects were put on hold to suit the regulatory and compliance measures. The real estate industry was tepid until the government announced some policies and incentives for the affordable housing segment. These policies and incentives provide a major fillip to the government’s plan for building homes for all by 2022. It is estimated that over 40 million urban homes need to be built to achieve this goal.
The government has conferred infrastructure status to the affordable housing sector. This helps to ease fund availability for the projects. The interest subsidy for low and economically weaker sections and additional tax benefits for both the home -buyers and developers is also envisaged under the new policy by the government.
What does RERA do?
RERA or the Real Estate Regulatory Act envisages to bring in accountability and transparency in the real estate sector. It will also bring in uniformity and a chain of fair practices to protect the interests of the buyers. The key focus is on the buyer and safeguarding his interests.
RERA also specifies the creation of a Real Estate Authority and Appellate Tribunal for each state to address any issue the home buyer faces.
What does it mean for an investor?
With RERA coming into effect, the buyer gets the benefit of paying just for the carpet area compared to the super built-up area as was the norm. RERA promises a better rate of interest for the buyer if they default a payment and since each step is monitored, it reduces the risk of the builder insolvency.
A buyer is entitled to full refund of the amount paid as advance or otherwise in case there is a mismatch in the commitments made by the builder and the actual project. To top it all, any grievances will be redressed quickly.
A shift in focus
With all these laws and regulations in place, the focus shifts to the buyer instead of the builder. The buyer, who used to be uncertain about the status of a project, now has access to all the information he needs in a timely manner. This transparency and accountability are what will make a person invest in an affordable home.
At Provident Housing, we have always put the buyer first. Over the years, we have not compromised on our values. We have always maintained transparency making us one of the most preferred real estate brands in the country. Karnataka is one of the first states in the union to join the RERA bandwagon, and we are working to achieve 100% compliance with the new regulations.
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