Buying A Home in Maharashtra? Know Why May Is A Good Month For You
The Real Estate Regulatory Authority in Maharashtra has inched towards reality. Retired bureaucrat, Gautam Chatterjee is said to become the regulator's first chairman and thus, will be the go-to person with respect to Mumbai's infrastructural developments. The housing regulator will monitor all real estate-related sales and transactions starting May 1, 2017.
Maharashtra, thus, joins almost 13 states that have notified their rules under the Real Estate (Regulation & Development) Act, 2016. In fact, Maharashtra had notified it earlier but after opposition from consumers for having diluted certain sections of the Act, the issues were reconsidered and have now been notified again.
The first draft rules released by Maharashtra received as many as 650 responses and oppositions. One of such oppositions was regarding the fee to lodge a complaint which rules framed by Centre fixed at Rs 1,000 while Maharashtra's draft rules put this at Rs 10,000 making it very expensive.
As per the previous rules, a developer could terminate a flat purchase agreement on a week's notice even over the mail to a defaulting home buyer. However, the developer could refund at a leisure of six months and without interest.
Third, there was no mention of the status of the ongoing project which is an important aspect of the rules under the Real Estate Law. All this and more led to the revision of Maharashtra's draft rules.
Under-construction homes now protected
According to data released by PropTiger.com, over 2,000 projects are under-construction and over 1,200 projects are in pre-launch and soft-launch stages in Mumbai. It is good news because the regulator would have been most awaited by migrant and resident homebuyers especially when data confirms that Mumbai, Pune and Bengaluru were among the leading cities that contributed maximum to overall home sales across Indian real estate markets.
Besides, data suggest that other investment destinations across Maharashtra such as Dombivali, Kalyan West, Kharghar, Sil Phata, Thane West, and Vangani which have been top demanded localities will be protected by the housing regulator.
Also, in terms of user searches, PropTiger.com data show that potential home buyers were also inquiring about properties in Andheri East, Badlapur East, Goregaon West, Kandivali West, and Panvel. Refer graph.
Property prices make it important to have a regulator
Prices in central Mumbai are so high that being protected by a common unifying law is the least to ask for and the Real Estate Law will do just that. On an average, a 1BHK apartment in Mumbai costs homebuyers about Rs 45 lakh, 2BHK unit at Rs 1.05 crore, 3BHK unit at Rs 2.70 crore, 4BHK unit for Rs 6.95 crore and a 5BHK unit will move in the market for Rs 13.50 crore or more.
In case of project delays, home buyers have in the past been wrecked, paying high-interest rates to the bank. Post the regulator, the onus of paying the interest amount will fall on the developer which is a big relief.
Should you be expecting price reduction?
Perhaps, no. “Whatever correction in prices could happen has happened, and developers cannot reduce prices further even if they wanted to – doing so would, in many cases, seriously impact their ability to stay on the market. In fact, RERA will mean that promoters will be bound by more procedures, and this may increase the cost of their projects - costs which are likely to be passed on to the consumer. In other words, RERA could be instrumental in inducing cost escalations in many cities,” says Kishor Pate, CMD, Amit Enterprises Housing Ltd.