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SLOWDOWN IN SALES LED TO A HUGE INVENTORY IN RESIDENTIAL REAL ESTATE SECTOR OVERHANG AND RESULTANT MAJOR CORRECTION IN PRICES

 
 
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SLOWDOWN IN SALES LED TO A HUGE INVENTORY IN RESIDENTIAL REAL ESTATE SECTOR OVERHANG AND RESULTANT MAJOR CORRECTION IN PRICES
by System Administrator - Sunday, 19 August 2018, 3:47 PM
 

By : M.S.Yatnatti: Editor and Video Journalist Bengaluru : According to real estate experts the Indian Residential Real Estate sector is currently going through a period of major correction. A slowdown in sales has led to a huge inventory overhang and resultant correction in prices .As the Sector continues to face its worst slowdown in recent years, the proverbial Moment of Truth has finally arrived. It seems that all the external forces that could potentially impact the Sector have chosen this moment as most opportune to converge adversely; as if determined to shake up the Sector at its very foundation; and purge out all poison that had accumulated due to many decades of opaque practices, inefficiencies and lack of governance mechanism. The Real Estate Regulatory Act (RERA) is the most potent of these external forces. The RERA aimed at bringing in transparency and redefining the engagement between various stakeholders is proving to be a game changing event. While the Act might transform the way in which various stake holders operate, it will particularly have a far-reaching impact on residential developers, who would need to recalibrate their business practices to stay in the game. The transformation in business practices with RERA being a catalytic force wouldensure that only serious and strong players remain within the sector. Reportedly The implementation of the Real Estate Regulation (and Development) Act, 2016, in the country is woefully short of expectations even almost a year after all its sections became law on May 1, 2017.Of the 28 states (the Act is not applicable in J&K) where the act is to be enforced, only three have appointed a permanent regulator, only 14 states have functional portals, and only 20 states have notified rules. All seven UTs, however, have notified the rules.Maharashtra, MP and Punjab have appointed permanent regulators under Rera. All other states are functioning with interim designated regulators, a report said.Reportedly as many as 542 ongoing real estate projects are facing uncertainty with the Real Estate Regulatory Authority Karnataka (RERA-K) issuing a notification prohibiting projects with provisional approval from doing business. The notification, which came into effect on April 1, 2018, mandates that builders get permanent approval before advertising projects, entering into agreement with customers and accepting advance money from them .Following the move, RERA-K authorities have started issuing permanent registration numbers to approved projects. The notification, however, has cast a shadow on projects which are under the process of approval. Most of them are in Bengaluru. RERA-K, clarified that builders are at fault as they were not supposed to take money from customers and do business based on the provisional approval number given to them. "Section 3 of the RERA Act clearly says no promoter shall advertise, market or sell the product until the project is permanently approved. The provisional approval number is an acknowledgement of sorts and has no legitimacy. Builders shouldn't have gone ahead,”.See that apartment project is RERA Approved. Take precautions as buying property is not easy. Many check lists have been reportedly published by many on the internet and websites and blogs.Please consider each one of them and do not over look any good point..Reportedly buying a resale property has always proven to be advantageous from choosing a strategic location to acquiring finer properties at better prices and ready to move properties . Although a resale apartment may be old, it is a good investment option owing to the low availability or supply of new properties in the area. Therefore, if the owner chooses to redevelop the property, it is likely to fetch him greater appreciation and better return on investment .Another advantage of buying a resale apartment will be if the buyer makes a one shot payment from his disposable income rather getting into the intricacies of seeking a home loan. However, one should be aware that seeking a home loan for a resale property would mean meeting additional legal and procedural requirements. It is mandatory that one should be aware of the legalities and paperwork before investing in a resale apartment. One can even consider hiring a good realtor and good advocate to get information on the apt resale property, the details of the seller, and running around for paperwork etc.