After RERA, Developers Will Be Ending These Practices

Nobody thought it would be easy to decode the new real estate law and its underlying implications. Even homebuyers, who are perceived to be the biggest beneficiary of the Real Estate (Regulation & Development) Act, 2016, will take some time to understand their new rights and duties. However, the biggest responsibility of reading, comprehending and implementing the various provisions of the law lies with real estate developers of the country. Along with the many big alterations, the sector would also see some interesting small changes as far as developer practices are concerned.

The easy marketing tone

Vying to get more and more people interested in their soon-to-be-launched projects, developers often got in price wars, often making unrealistic estimates. If there are two developers launching similar projects in one locality, there could hardly be a difference in rates unless there are quality-based differences.  If one developer announced he would be selling a 2BHK unit at his project for Rs 50 lakh, his competitor would the very next day claim that he would be offering units of similar sizes with better facilities at, say, Rs 45 lakh. Naturally, homebuyers go for the latter. Later, the burden of increased costs – this would happen invariably because of unrealistic cost analysis –  would be quietly passed on to buyers. As the rules of the new law are quite stringent with regards to funding, developers will have no choice but to make only realistic calculations. The project marketing pitch will have a new tone for sure.

The positive changes

The competition in the market did not leave developers with a choice. They had to go aggressive to be able to sustain. In most cases, the competition was more about picking faults in others than naming one's own qualities. The marketing pitch would unmistakably have that negative tone — we offer this and that while my competition does not! Without enumerating the plus points of investing in his own, a developer would be quick to point out the minus points of investing with other developers.

Now, a developer will be busy updating the Real Estate Regulatory Authority about his own progress. From here on, it would be more about making improvements one's own because the very sustainability of business would depend on action, and not the planning. From here on, be ready to listen to a positive marketing pitch from India's real estate developers.

Also Read: RERA Could Strengthen The Role Of A Broker In India