The Real Estate (Regulation and Development) Act (RERA), which came into force in 2016, has ushered in a lot of transparency in the real estate sector. The sector was grappling with homebuyers’ distrust over a long period of time and this was being reflected in litigations, protests, and more importantly, delay in project execution and competition.
Five years later, things have turned for good despite some teething problems. It has become more institutionalised, organised, accountable and transparent. This was revealed in a survey by Omidyar Network India and Boston Consulting Group titled ‘Five Years On: An assessment of RERA – The Road Ahead For a Stronger On-ground Regime’.
76 percent of consumers who are aware of RERA will buy only RERA registered properties. 70% of the consumers are aware of ‘RERA’ as a regulator. While metro/tier 1 cities have greater awareness, i.e. 85% in metro, the awareness in tier 2/3 cities is considerably low at 53%. Only 50% of the consumers are aware of only 2 basic benefits of RERA, i.e., the mandatory registration of the relevant projects and RERA as a grievance redressal forum.
The awareness of the RERA website continues to be dismal. The survey stated that 27 states have set up web portals with information available on ~110 parameters for the registered projects. However, only 14% of the consumer have visited the state RERA website, 45% of the consumers reported that they found it difficult to navigate the RERA website, and only 24% consumers of those who visited the website were satisfied with it.
A lot of improvement on the part of the regulator is warranted to make consumers and developers make full use of the RERA website to bridge the knowledge asymmetry about a project or a developer. Due diligence is an important component of any homebuyers’ decision before purchasing a home.
Despite the challenges, 64% of developers felt highly satisfied with RERA. 45% of the developers indicated dissatisfaction with the RERA website. Most of their dissatisfaction stemmed from difficulty in navigation and non-functionality of the website, the survey said.
The real estate sector is a significant driver of economic growth and it is pertinent that the sector impacts for good more consumers. The sector contributes 6.5% to India’s GDP and is the 2nd largest employer. An astounding 77% of the total assets of Indian households are held in real estate. This shows how valued a possession real estate has and will always remain.
Various state RERA authorities have been trying to strengthen the system. The Economic Times reported that in order to reduce the problems of homebuyers during the Covid-19 pandemic, e-courts have been set up by the UPRERA. 12,918 complaints have been registered through e-courts, and 12,150 complaints have been resolved successfully.
In June, the Ministry of Housing and Urban Affairs released a progress report. It stated that a total of 67,534 complaints have been disposed of by RERAs across the country.
However, The Mint reported that the non-enforceability of RERA orders needs serious rethinking to bring more trust to homebuyers. The Omidyar Network India and Boston Consulting Group survey were based on interactions and consultations with 1300+ stakeholders in India’s real estate ecosystem including consumers, developers, real estate agents, etc.