The implementation of RERA has got off to slow start with 11 of 28 states yet to notify the final rules as of July 31. Just seven have functional websites and four have permanent regulators, a report by Edelweiss stated. “Project registrations have been good in Mumbai and Pune but slow in other key markets mainly due to delay in notification of final RERA rules by states,” the report stated. In Mumbai and Pune, 862 and 542 projects or phases, which are counted as singular projects, were registered. Karnataka received 700 applications whereas Haryana received 400 registration applications. Final RERA rules for Hyderabad were notified in August and are yet to be notified for Kolkata, which is one of the eight major residential hubs of the country.
Barring the seven states which have instituted websites, the remaining are still in process of setting up a website and are accepting project registrations through submission of hard copies of the required documents. The seven states include Karnataka, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Tamil Nadu and Uttar Pradesh. Some states like Goa and Uttar Pradesh have extended the deadline for ongoing project registration. Telangana too is contemplation an extension. Developers in other states continue to demand an extension of the deadline. Few developers have filed litigations, challenging constitutional validity of the Act itself and questioned the inclusion of ongoing projects under RERA.
In Haryana and Uttar Pradesh buyers have objected to exclusion of projects with occupation certificate issued versus the more stringent completion certificate requirement as per central Act. Meanwhile, the implementation of this Act is expected to take a toll on sales as developers have stopped launching new projects for the time being. Collections also suffered on account of customer agreement being modified to comply with the new Act.
Major real estate companies are expected to see revenues decline during the April to June quarter on a sequential basis, according to estimates drawn up by analysts. In some cases, the decline is estimated to be as much as 30%. Anshul Jain, managing director, India, Cushman and Wakefield, said launches in the residential sector won’t meaningfully improve over the next two to three quarters.
“Developers need to make intrinsic changes to their business structure, operations and marketing strategies to comply with RERA norms,” Jain explained. The report also said RERA, coupled with GST, should help sustain current capital values. Oberoi Realty recently announced a no-GST impact marketing campaign on prices to weed out skepticism regarding a price volatility. While not every project might be able to absorb such an impact, the move has overall been deemed market moving.