Buying a New Flat in Pune: This is the Best Time
Across Pune, aspiring home buyers are waiting for Real Estate Regulation Act to be implemented by the Maharashtra State. Time and again, it has been always stated that the buyer must consider the reputation of builders like their past projects and online reviews before taking the decision to book a flat in their project.
On implementation of Real Estate Regulation Act, only builders with a very good reputation would remain in the competition. This would help in protecting consumer rights and interests of new home buyers.
Once Real Estate Regulation Act becomes an enforceable law, it would change the ways in which residential or commercial projects are planned, offered, sold and possessed. New home buyers would no longer need to worry about unfair practices in agreements, delayed possessions, un-notified alterations in building plans or any other risks.
The aim of Real Estate Regulation Act is to make real estate purchase very simple by bringing in better accountability and transparency in the deal. In doing so, it would infuse a lot more confidence among new home buyers who, at the end of the day, should feel as comfortable about investing in a new flat or property as they are about buying a Car or Gold.
Real Estate Regulation Act would enforce several solid rules for real estate buying and selling, including:
- Registration of every residential or commercial project with the appointed government body.
- Non-registered projects could not be offered for sale by builders.
- Mandatory uploading of project details by the developer on the (RERA) website, including approved layout plan and completion schedule.
- 70% of the advance payment collected from home buyers needs to be maintained in a separate or escrow bank account and would be used only for the stipulated project construction. These funds strictly could not be used off for other purposes, a practice that has contributed majorly for delaying residential projects in the past.
- Establishment of Appellate Tribunals that would handle any real estate related issues or disputes, with the intention of delivering quick and unambiguous resolution.
- Setting up of an advisory body to effectively deal with matters related to government sponsored real estate development.
- A very important point to note here is RERA once enforced would not only protect the buyer but the builder too from non-payment. While the builder is required to obtain necessary documentation such as the completion certificate, the buyer is liable to be fined for delays in payment.
All this may sound too good to be true, and in fact, it is now going to be possible because RERA is likely to come into full force from May 2017. All the individual state governments need to get their ‘acts’ together to comply with its requirements and adopt it. The good news is that they do not have the option of not doing so as the Central Government is determined to push the Real Estate Regulation Bill no matter what.
The real estate market is currently showing positive signs of revival. Even though builders struggle (also because of the recent demonetization of larger currency notes) they continue to launch new projects and raise funds to meet the committed completion timelines. With RERA in place, several not so credible builders could go out of business. Buyer would be protected from builders with deceptive or unfair motives. This would, in turn, infuse a much needed positive sentiment amongst buyers and consequently help to increase demand.
Increased sales would improve the cash situations of the builders that remain after the weeding out process due to RERA, and projects would be automatically delivered in time.
Should you wait for RERA or Buy Now?
At the current point in time, because of the lower demand seen over the last 2-3 years, property prices across major cities have sunk to incredibly low levels. New home buyers have a wide range of options within a modest budget.
RERA would take another year to be implemented meanwhile, there are other dynamics which are changing on the real estate market. Reduced pricing coupled with attractive deals in most cities, and the fact that more and more fence sitting buyers have run out of patience and are coming onto the market with firm ‘buy’ decisions, have kick-started the modest but very real recovery we are seeing on the residential market. In Pune, builders have already witnessed a 20% increase in buying during this festive season.
What does this mean for property buyers? Very simply, any revival in buying activity eventually leads to increased prices. Such is the immutable law of demand and supply. Given that demand is increasing steadily even now, property prices would begin rising even before RERA becomes a market reality next year.
Industry watchdogs unanimously agree that there is no scope for current property prices to decrease further. Whatever correction in prices could happen has happened, and developers could not reduce prices further even if they wanted to. Doing so would in many cases seriously impact their ability to stay in the market. An important fact here is RERA would mean that promoters would 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.
It should be noted that while RERA would ensure that unscrupulous developers and their business practices would be driven off the market, it would simultaneously ensure that builders with sound reputations and impeccable track records would become stronger. One of the most important intentions of the new law is to support such developers so that they could continue to serve the needs of property buyers in the wholesome and transparent manner which they are known for.
In short, for buyers who have no intention of dealing with any but the most reputed developers, there is no real advantage in waiting for RERA to kick in. If one is working with a reputed developer, the privileges, benefits and safeguards that it would bring already apply today.
Another valid argument against waiting for RERA before buying a property is that once the Act is in place, it would become mandatory for builders to invest extra time with regulatory bodies to work along the extensive details of construction plans, clearances, approvals and other details related to their new projects. Paradoxically, this could in fact result in delayed deliveries where the opposite effect was actually intended.
Even though many buyers feel that they should wait for RERA to be implemented before buying a flat, the fact remains that there are already many builders with strong reputations and credible market practices. Buying a property from them could turn out to be wise decision if RERA results in upward pressure on prices. Also, if one is looking to make the most of current attractive pricing and offers, there is actually no better time than now. The time and effort spent in taking advantage of the favourable market dynamics existing today would prove to be the soundest property investment. The sole provision is that one should only patronize a reputed developer with a good track record for delivery and construction quality.