After a prolonged roaring run, real estate is witnessing deceleration with drop in housing sales and affordable housing finding itself at the crossroads. Shekhar Patel, the newly elected president of CREDAI-National (Confederation of Real Estate Developers Associations of India) in this straightforward interview, presents his agenda and talks about the need to have inclusivity in urban development and policy prescription to revive affordable housing, boost rental housing and revamp RERA regulation, clearly laying the real estate path ahead. Excerpts.
As the new president of CREDAI National, what is your priority agenda? What policy prescription do you suggest for the sustainable growth of the real estate sector?
As the President of CREDAI National, my priority agenda is focused on five strategic pillars. These include skilling, data analytics,reforestation, affordable housing policy reform and ease of doing business. We will be enhancing the skills of the workforce in the real estate sector to improve productivity, quality and safety standards.Regarding data analytics, we will be establishing a robust data analytics centre in collaboration with RERA authorities and the ministry of housing and urban affairs (MoHUA) to ensure reliable and authenticated data for the sector. Promoting sustainable development through large-scale reforestation initiatives under the CREDAI Green India Council,will also form part of the priority agenda. We will be pushing for affordable housing policy reform-advocating for the revised definition of affordable housing that aligns with current market realities, necessitating the need to remove the outdated price cap of INR 45 lakhs. We will also be collaborating with government authorities to streamline approval processes, reduce compliance costs and improve regulatory transparency for boosting ease of doing business.
For the long-term sustainable growth of the sector,I recommend that besides revising the definition of affordable housing in line with market conditions and simplifying project approval processes through digitization, the government should provide tax incentives for green buildings and energy-efficient construction and implement measures to promote rental housing and reduce speculative buying.
Amid high prices and still elevated interest rates, residential real estate has seen continuous decline in sales for the last two quarters. How do you see the road ahead for real estate in general and housing in particular?
While the last two quarters have seen a decline in sales, the long-term fundamentals of the Indian real estate market remain strong. Factors like rising urbanization, a growing middle class, and government initiatives such as the PMAY scheme will continue to drive demand.
In the short term, the sector may witness cautious buyer sentiment due to high interest rates. However, we expect a gradual recovery as inflation stabilizes and interest rates moderate. For housing, demand in the mid-segment and affordable categories will continue, especially in Tier 2 and Tier 3 cities, driven by first-time homebuyers. Developers must adapt to offering flexible pricing, innovative payment plans, and sustainable housing solutions.
Developers are hyping luxury housing, at the cost of housing for the middle class. Some industry stalwarts have cautioned against going overboard and called for building homes for people who can afford and live there. Comment.
It is true that luxury housing has seen significant growth recently, but we must recognize that real estate is a diverse sector catering to different buyer segments. Developers have responded to the demand for premium homes, but this does not mean that mid-segment or affordable housing is being ignored.
The focus should be on maintaining a balanced portfolio. Developers must continue to cater to the needs of the middle class, which forms the largest segment of homebuyers in India. CREDAI encourages developers to adopt a balanced approach 바카라” focusing on affordable, mid-segment, and luxury housing, ensuring inclusivity in urban development.
Today affordable housing is at the crossroads as developers have considerably reduced supply due to low margins. You have suggested lifting the INR 45 lakh price cap for affordable housing. What other measures do you suggest to revive affordable housing?
In addition to doing away with the outdated INR 45 lakh price cap, several other measures are essential to revive affordable housing. There is a need to incentivize developers by providing tax benefits for affordable housing projects including GST input tax credit restoration. Affordable housing projects in urban areas need to be provided higher FSI to improve viability of projects. The government must encourage PPP models for affordable housing with faster land allocation and approvals. Further, to boost affordable housing supply, incentives should be given to developers to build rental housing under affordable housing schemes , besides providing access to low-interest loans for developers of affordable housing through priority sector lending.
Of late, the real estate sector has been making some unsavoury headlines like the recent one where the Supreme Court has ordered a CBI probe into the alleged builder-banker nexus. How do you see such developments impacting the image of the sector and the sentiment of the buyers? What is CREDAI doing to promote transparency and credibility in the sector?
Such developments certainly impact the image of the sector and can erode buyer confidence. However, it is important to understand that these are isolated incidents and do not reflect the industry as a whole. CREDAI strongly advocates for transparency, ethical business practices, and accountability. In order to promote transparency CREDAI has implemented Code of Conduct , mandating ethical practices for all CREDAI member developers. Through consumer grievance redressal mechanism, CREDAI assists buyers in resolving disputes amicably.Through mandatory RERA compliance, we encourage members to strictly adhere to RERA regulations. Further, through our skill development programmes, we ensure high standards of professionalism among developers and workforce.
There is a dire need for reliable real estate data to increase transparency and help stakeholders including property buyers understand demand-supply dynamics for long-term healthy growth of the sector. What is CREDAI doing in this regard?
CREDAI has taken a major step by establishing the Data Analytics Centre, a centralized platform in collaboration with RERA authorities and MoHUA, to provide authenticated, real-time data for the real estate sector.This initiative will ensure accurate demand-supply analysis , providing developers , buyers and policymakers with reliable data. Buyers will be able to make informed decisions with price transparency ensured through reliable data. Regulatory compliance tracking will ensure that developers meet RERA norms. Further, data analytics centre will provide sectoral insights, offering market intelligence reports for all stakeholders. Our vision is to create a trusted source of real estate data, strengthening market confidence.
RERA has helped regulate the realty market, bringing in greater transparency and professionalism. However, the confidence of homebuyers has been shaken as RERA fails to implement its decisions to provide relief to homebuyers . Shouldn바카라™t RERA be empowered to implement its own decisions? What else can be done to revamp RERA?
Yes, it is crucial for RERA to be empowered with enforcement authority to ensure that its decisions are effectively implemented. This can be achieved by empowering RERA with execution authority , allowing it to directly enforce its orders without the need for civil court intervention. Moreover, a central enforcement mechanism should be established , creating a dedicated RERA enforcement wing in each state with the authority to take action against non-compliant developers. Dispute resolution should be fast tracked by setting up mediation and arbitration centres within RERA . Besides this, there should be regular compliance audits , mandating developers to submit quarterly progress reports on ongoing projects.There is a need for enhanced consumer awareness and for this awareness campaigns should be conducted to educate homebuyers about their rights under RERA. CREDAI remains committed to collaborating with RERA authorities to enhance the effectiveness of the regulatory framework.
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