The Union Budget 2017 in order to make the ‘Housing for all’ dream come true for consumers, not only has to provide ample affordable housing stock, but also has to devise ways so that the end user requirements are met successfully.
What is most alarming today is the fact that a growing number of home buyers have not been given possession of their homes by developers for more than 5 years, and so are forced to turn to the law for redressal.
Here, the government needs to streamline our judicial procedures. Why do lower courts do not appeal to people? And, hearing sessions are fixed after long periods of intervals. So, the government should think of a mechanism to deal with this.
See this case in Delhi: Jaypee flat owners of various societies had filed cases in NCDRC as small groups first as per the lawyer's advise. When the court denied their case entry, they had to form consumer associations to file case under section 12-1-B in the guidance of another lawyer. But the NCDRC judge has now referred all such cases to its larger bench to determine if buyer associations confirm to definition of consumer society and can take up grievances of their members legally at NCDRC. Thus, late project delivery cases for adequate compensation are mounting up at the judicial desks, with no clear pathway for consumers so far.
Home litigation cases are far too many. For small consumers, judicial involvement is more troublesome. They do not have the financial strength left to chase after lawyers and courts after having repayed hefty home loan interest rates needlessly for so many years.
With RERA regulators yet to be set up in states, the government should seek out a way in this budget so that the consumers who have already had a long wait for homes, get fast track compensation for delay and are not further exposed to lengthy and complex judicial process.
Creation of supporting judicial frame-work is the need says Anshul Jain, Managing Director, Cushman and Wakefield India, reflecting on this grave problem. “An abnormally high number of all pending civil and some criminal cases with the judiciary involve real estate. This has resulted in locking up a large chunk of much needed real estate out of markets and people and further helped to create shortages / scarcity resulting in further increasing prices. The government needs to seriously think of adding more resources and mechanisms to deal with real estate related litigation and take care of this huge backlog.”
“Offer financial protection from project delays to home buyers and tax benefit on interest payment from date of purchase instead from date of possession,” says Ajay Jain, Executive Director – Investment Banking & Head Real Estate Group Centrum Capital Limited.
Besides, concurrent steps like immediate creation of a nationwide digital property database, bringing in title insurance, etc. will also help to bring in transparency and better systems that will also help in the implementation and functioning of RERA, says Anshul Jain. Government needs to provide adequate financial and regulatory resources to support these measures.
“More spends as also concrete steps in the digitisation of land/property records will considerably reduce litigation, free up more lands in cities to make it more affordable and reduce project timelines which will directly translate to lower costs to the end consumer," says Ravindra Pai, MD, Century Real Estate.
In recent years, for individual home buyers, prices have continued to increase by approximately 7-10 percent per year. Home buyers from this upcoming budget 2017 are expecting reduction in high finance cost and stamp duty charges. They are also looking forward to the govt introducing some benefits for the primary house buyers in the affordable housing segment. And, first-time home buyers in the Metro are expecting the govt to announce tax exemption for them. They are also hoping the govt increases the tax deduction limit for housing loans.
Small incremental steps will not bring desired results for masses, says Gaurav Gupta, Director, Omkar Realtors. RERA requires higher capital for the projects. Budget should timely address this issue. Otherwise, this will lead to serious under supply and higher rates of real estate. Properly incentivise the model of development of low cost housing for the developer to develop housing at lower cost so that there is enough supply.
GST is an important area which needs clarity when it comes to real estate which will benefit the buyers at large replacing the hosts of taxes being presently levied. Land acquisition for development is an important area which the budget should address. With the land prices being higher, the cost of real estate ends up to be higher. Incentivising the same will result in real estate which is within the reach of the buyer.
The government must get the statutory authorities responsible for clearing the projects within the purview of law. Administrative reforms should be made to facilitate quicker approval process which will help developers complete and handover projects on time, keeping customers as priority. This will infuse confidence in home buyers, says Surendra Hiranandani, Chairman & Managing Director, House of Hiranandani.
To roll out smooth implementation of Prime Minister Awas Yojana, benefits should be passed on directly to home buyer instead of to housing finance company, says Ajay Jain. As also, fast implementation of Real Estate Regulatory Bill in each state will not only protect the consumer but also encourage the individual buyer to invest in the real estate market.
To ease urban exodus, the govt should make an effort to improve connectivity in the peripheral areas of cities, especially the metros. This, in turn, will allow the conversion of rural to urban regions, thereby promoting smaller cities to gain real estate momentum and increase job opportunities, says Anshul Jain.
The government not only has to embolden the consumers with confidence by providing an amicable environment for real estate, but also has to increase their purchasing power and give them a solid judicial backing for quick and happy transactions.
Updated Date: Feb 01, 2017 08:20 AM