A pan-India survey by Track2Realty Brand X Report 2017-18, finds that a large number of Indians are not convinced with reforms like the Real Estate (Regulation and Development) Act (RERA), demonetisation, the Goods and Services Tax (GST) or the Benami Transactions Act. They question whether these reforms have brought about any tangible gains for them. This may be disappointing to the developers, who were hoping that the recent policy changes would bring the home buyers back to the market.
No less than around two-thirds (64 per cent of the home buyers) have questioned what these reforms mean for them. Even more in number (70 per cent) maintain that their experience in the housing market has been no better in recent times. A substantial number of home buyers (58 per cent), even question the intent of the policy makers, in getting policies like the RERA implemented effectively.
These are the findings of a pan-India survey by Track2Realty, for the Track2Realty Brand X Report 2017-18, which is expected to be released in the end of May 2018. The survey was aimed at understanding the emerging ecosystem in the sector and the trust level of home buyers. The survey was conducted for the sixth consecutive year in 20 cities – Delhi, Noida, Gurugram, Ghaziabad, Faridabad, Mumbai, Kolkata, Bengaluru, Hyderabad, Kochi, Ahmedabad, Chennai, Jaipur, Lucknow, Bhopal, Patna, Bhubaneswar, Coimbatore, Pune and Chandigarh – between March 10 and March 31, 2018. A structured set of questions on the trust and transparency in the sector and understanding about the recent policy changes leading to their purchase decision, were given to the respondents, who belonged to a mix of the luxury, mid-segment and affordable housing buyers. The survey tried to capture the mood of home seekers, who were skeptical to commit due to the prevailing lack of transparency.
RERA fails to bring accountability and transparency
Do the Indian home buyers feel that the reforms have instilled a sense of fear in the minds of the erring builders? As many as 88 per cent reject this assumption and maintain that the developers are gradually adapting to the changed regulations and are finding ways and means to escape, as well. More than half of the respondents (54 per cent), feel that the new policies may be making the developers more accountable to the authorities, but definitely not to the buyers. A much larger number (78 per cent), feel that the government agencies are so closely linked to the developers that the buyer is never the focal point of reforms.
“When the government agencies are a party to these so-called reforms like the RERA, I have no hope of any meaningful changes. In this business, the party that has more financial clout, will always be treated with soft gloves by the government officials. We all know whether it is the builder or the buyer, who has the financial clout,” maintains Ankit Sharma in Mumbai.
A substantial number of Indians, as many as 80 per cent, think that the developers have been given escape routes, vis-à-vis their ongoing projects – a space where maximum violations have taken place. No less than 72 per cent of the buyers are dejected, to the extent that they have no hope of getting their homes, even after waiting way beyond the delivery deadline. “Just consider this scenario – a developer who has launched a project way back in 2002 and has been repeatedly failing to deliver since 2008, now, with his RERA registration, his fresh completion deadline will be 2022. The RERA officials seem to be clueless, when developers give arbitrary deadlines. Are we home buyers investing in a house for our grandchildren?” questions Priyanka Saraswat in Gurugram.
Builder-official nexus to blame for policies’ failure, say buyers
A majority of Indians (58 per cent), feel the reforms are half-hearted efforts by the government, as the authorities do not wish to rattle a business segment that contributes to elections. 64 per cent feel there is absolutely no point in going to a real estate regulatory authority, as it would just be the beginning of a long battle and the builder understands that such a fight is not within the means of buyers.
A dejected Manu Chaudhary in Greater Noida west, who went through such a situation recalls: “Our builder asked for escalation charges, which was not the part of the builder-buyer agreement. Over and above that, he is also asking payment for additional super built-up area, which can neither be calculated by us, nor has been done with the consent of the majority of the buyers. Now that we have approached the regulatory authority, the builder is harassing us by all means and has refused the handover.”
It is not just the ambiguity around the RERA that makes Indian home buyers feel that there is no hope for them. Three-fourths of the buyers (72 per cent) maintain that most of the reform measures have not touched upon the average Indian home buyers.
Realities of RERA, according to home buyers
- Outlook on reforms: 64 per cent feel that is nothing in the reforms for them; 22 per cent are not sure about the impact, while 14 per cent feel there have been visible changes.
- Experience in the market: No different, say 70 per cent; some difference, say 18 per cent; not sure, say 12 per cent.
- Intent of the policies: No seriousness effort (58 per cent); The reform process is complex (32 per cent); 10 per cent not sure.
- Regulations as a deterrent: 88 per cent say builders have no fear; 12 per cent say there has been some change.
- Greater accountability: 54 per cent say there is no impact for buyers; 22 per cent feel buyers have now got a voice; 24 say there is no immediate impact.
- Grey areas: Nexus between builders and officials (78 per cent); lack of transparency (22 per cent).
- Reasons for lack of trust: Ongoing projects allowed to escape (80 per cent); other reasons (20 per cent).
- Hope with regulations: 72 per cent say no hope with stalled projects; 22 per cent feel there is a ray of hope; six per cent not sure,
- Seriousness of policy changes: Half-hearted effort (58 per cent); no easy solutions (24 per cent); not sure (18 per cent).
- RERA is a solution: No (64 per cent); yes (18 per cent); too early to say (18 per cent),
- On-ground impact of reforms: No impact (72 per cent); marginal impact (16 per cent); not sure (12 per cent).
(The writer is CEO, Track2Realty)