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It is common knowledge that urban housing is a nightmare in India. Mired in confusion caused by unscrupulous Builders (who speak to you about different colours of money), unclear regulatory policies, shady brokers, exorbitant financiers, not to mention real-estate sharks, and other ilk from the underground, it is a wonder if your dream of acquiring your own apartment is achieved without severe heart-burn. And, of course, the most common ailment of the sector: total disregard for customer service and complete subversion of delivery commitments (both in terms of time & quality of the end product).
This scary scenario is not restricted to the metro locations alone. While the picture is a little better in smaller cities, the difference is only one of scale not content. Even buying residential land is fraught with danger for the purchaser as land titles are often unclear. Clearly it is caveat emptor all around.
And, this state of affairs has lingered for so long that this has become the paradigm of the sector, and is now taken as a par for the course.
However, things are set to change. Or, so we are led to believe as customers with the much heralded The Real Estate (Regulation and Development) Bill, 2016, becoming an Act on May 1, 2016. With the promise of taking cudgels on behalf of the long-neglected consumer, there is optimism in the air. However, the Builder's lobby has been busy too, seeking multiple safe guards to enable them to protect their interests in the face of this unprecedented aggressive tone of customers.
Frankly, the truth of this industry has many facets, depending on who is presenting the issue. The Builders believe that they are stymied by outdated regulations with ham-handed & corrupt bureaucracy seeking their pound of flesh at every turn. Given the general hostility to business in most quarters of the government, it is not untrue that Builders face uphill tasks at every stage while awaiting project clearances. This is compounded further by the presence of multiple layers in the government (town planners, utility departments, fire & safety experts, revenue officials, etc. - you name them & they are involved, each awaiting their turn to slice the salami). Are you then surprised that there are cost over-runs & poor quality of construction? And, by the end of it, you have buildings constructed in total violation of the city's planning norms (remember Adarsh in Mumbai?), and in some cases Builders who abscond with customer's deposits & instalment payments leaving behind semi-constructed eye sores that line the city's landscape, often collapsing at the first sign of monsoon.
Too often we find today that the ball lands into the judicial arena where after many years 'justice' is delivered, leaving losers all around. The classic case of the Campa Cola Society in Mumbai sent shivers down the spine of many Apartment owners in Mumbai because they know that illegalities abound in every second Housing Society in Mumbai (as well as other cities).
If one were to believe the Real Estate experts, 2016 was projected as the year of investment after a dull 2015. With half the year over, I am not sure that this rosy prediction is likely to be fulfilled. The usual suspects are likely to be trotted out at the end of the year as causes of ailment: lack of land parcels, bank loans being tight, wary consumer sentiment, high input costs, high inventories in builder's hands, etc.
While I would not say that matters have not improved over the years, the rate of change has been painfully slow and the angst of customers is too loud to ignore. This applies at every level: while the premium sector gets a lot of attention through glossy advertising, buyers will remain bruised with shoddy quality and poor customer service given the one-sided contracts that are inflicted on purchasers; the middle class awaits delivery of its much anticipated two-bedroom apartments after borrowing large housing loans & will slave a lifetime to pay EMIs; and, finally at the lower end, the queues for the one-bedroom apartments at 'affordable prices' is ever-increasing.
The tragedy of the Real Estate sector is that it lacked regulation for a long time. With the capacity to generate 75 million jobs by 2022 and become the largest sector of employment (as per a reported KPMG report), this sector deserves more attention for multiple reasons, chiefly the driving desire of all Indians that they must have a 'Makaan', and not just 'Roti, Kapda'.
The government's governance job is incomplete still. Apart from notifying rules both at Central & State levels by October 31st, it also should make it easier for players other than Consumers (chiefly, Builders & Developers) to play a proper part by making municipal laws more logical & implementable without having to pander to the whims of local officials.
Sure, the game is changing - as it should. The good news is that all the players involved - including Real Estate agents - are gearing up for the future. That's a positive start and needs to be cheered. Now to increase the pace!
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