With the implementation of the New real estate regulatory bill, realty sales are expected to rise by 10% and the new home launches are expected to decrease by 20%. Foreign direct investment into the real estate sector is also expected to increase by 20%. The bill is likely to boost realty sales and safeguard the interest of the buyers.
The Real Estate (Regulation and Development) Act 2016 passed on 25th March 2016 has brought in cheer for the real estate sector. Pawan Kumar Dhoot, MD Dhoot Group, a prominent name in the realty sector highlights that it has brought the much-needed transparency and accountability in the real estate industry.
The act has safeguarded the interest of the buyers as it restricts the developers to sell their homes before getting all the project approvals. It increases the cost of capital for the developers as they will have to look for equity rather than structured debt to finance the land.
Dhoot Group developers further stated that such an act was much needed in a sector known for deceitful and fraudulent dealings. However, the prices of houses will not fluctuate as the rise in cost of capital will not be passed on to the buyers by the developers in the present scenario of unfavorable market conditions. It is expected that the banks will start funding for land purchases as well. The individual or group investors, who usually invest in residential properties with an intention to withdraw even before the project is completed, can now participate as lenders and not as investors.