Real estate industry awaits policy action from next government
Even if the next government proves to be ‘real estate friendly’, it has its work cut out
May 11, 2014
Source : The Financial Express


MUMBAI: Like most other business sectors, the Indian real estate market holds its breath for a stronger and more determined government. The perception which is currently driving market sentiments is that market momentum can either accelerate, remain unchanged or decelerate depending on which party is voted into power. Speaking purely from the viewpoint of market sentiment, there is some validity to this perception. However, the fact is that the true benefits of political stability and proactive reforms — if these indeed ensue — will not be visible or tangible for quite a while after the new government takes over.

Even if the next government proves to be ‘real estate friendly’, it has its work cut out. There are vital regulations and initiatives related to real estate that have been gathering dust on bureaucratic tables which need to be fast-tracked and implemented. Though these regulations and initiatives are crucial for the real estate sector’s growth, there are various complexities that must first be sorted out.

One of the challenges is impartially attending to the interests of all industry stakeholders. The other challenge is to shore up all loopholes that could remain and be exploited if not identified prior to a regulation’s implementation.

This is especially true of the pending Real Estate Regulatory Bill, which has been hotly contested at every stage. There is no doubt that it must be enacted sooner rather than later so as to make the Indian real estate sector more attractive for foreign investors. However, it does appear that no version of this Bill that emerges after the various objections and arguments from the industry’s stakeholders have been considered will be accepted across the board. If this is the case, it will require a strong and determined government to push it through. This also applies to the regulations pertaining to FDI in multi-brand retail — a subject that has drawn an incredible amount of political flak — which would have a major impact on India’s attractiveness as a destination for foreign retail heavyweights.

Developers have been campaigning for a faster project approval process, and this is justified but by no means easy to do. Again, the government faces the challenge of ensuring that any fast-tracked approval process does not result in misuse and exploitation. While faster approvals would boost the supply pipeline and help bring prices down, the government must also ensure that construction quality norms are not compromised in

the process. Also, faster approvals could result in the provision of support infrastructure falling several more laps behind while newer precincts are being developed.

That said, swifter and more determined decision-making than what we have seen so far is definitely of the essence. Many overseas investment funds have so far abstained from the Indian real estate market because of the lack of regulation, political instability and bureaucratic quagmire. The new government will have the opportunity of making Indian real estate more investment-friendly and attractive, and this would go a long way in meeting its considerable capital requirements. Investor-friendly, streamlined policies from the new government can be a game-changer for Indian real estate.


* The industry expects the new ruling government to be less dependent on smaller coalition parties for support.

* A clear electoral mandate will help real estate investors obtain clarity on future policies, which is critical while making future business plans.

* The industry expects real estate investment trusts (REITs) to become operational in India so as to increase liquidity.

* The industry expects the approval and implementation of the pending Real Estate Regulatory Bill

Latest Realty News

Couple arrested for cheating banks
May 11, 2014
VISAKHAPATNAM: While many people find it very difficult to get a home loan for constructing their dream house, a couple allegedly managed to deceive two different banks and secure two different home loans.
RBI asks banks not to levy penalty on pre-payment of loans
May 11, 2014
MUMBAI: Providing relief to borrowers, Reserve Bank today directed banks not to levy any penalty on individual borrowers for pre-paying floating loans.
Only builders, banks gain when you take loan to invest in realty
May 11, 2014
MUMBAI: An acquaintance recently told me that his colleague had bought a flat for Rs 40 lakh and is selling it at Rs 80 lakh. He had made a down payment of only Rs 8 lakh at the time of buying the flat. According to him, real estate was the best investment option. This is something we hear almost every second day as financial planners.
Supertech to invest Rs 1,000 cr on housing project in Gurgaon
May 11, 2014
DELHI: Realty firm Supertech today said it will invest Rs 1,000 crore over the next four years to develop a new project in Gurgaon.
Corporate fraud rose dramatically in last few years: Survey
May 11, 2014
DELHI: Instances of corporate fraud like corruption, money laundering and bribery in India have risen substantially in the last few years, a survey has found.
UK’s Varakas Group to build resorts in Gujarat
May 11, 2014
AHMEDABAD: It seems that the fragrance of ‘Khushbu Gujarat Ki’ campaign led by actor Amitabh Bachchan to promote Gujarat Tourism has spread to overseas. A UK-based NRI investor is planning to invest in hospitality at tourist spots in Gujarat.
Around $16 billion locked in Mumbai's fund-starved real estate sector
May 11, 2014
MUMBAI: Close to Rs1,00,000 crore (around $16 billion) by private equity funds is locked in the fund-starved real estate sector as hundreds of projects get delayed across the country and investors struggle for an exit.
Real estate sector: Investor money waiting at the gates
May 11, 2014
MUMBAI: The broader enthusiasm in the market has caught the real estate sector too, going by the slew of investments that are on the upswing.
Tata Sons chairman Cyrus Mistry's company wins battle 'royal' against lawyer
May 11, 2014
HYDERABAD: A company owned by the family of Tata Sons chairman Cyrus P Mistry has won a victory in the Andhra Pradesh high court as it tries to safeguard the assets it bought from the heirs of the erstwhile Nizam of Hyderabad. In an order last week, the court put a temporary halt to the sale or transfer of Cyrus Investments' assets in Hyderabad by the lawyer who was given a general power of attorney for the assets by the Mumbai-based company.
Pay property tax even on holidays this month
May 10, 2014
PUNE: The civic administration has planned to keep the property tax payment facility open even on holidays this month, so that the maximum number of citizens can avail of the discount offered on payments made before May 31.

Latest Realty News Of State

Realty Talk's