residential – Page 12 – FindMyProperty

RERA (Real Estate Regulation and Development Act) is likely to pre-launch stage will be abolished and a project can be launched only after obtaining all approvals. Real Estate Developers are expected to move a build and sell model instead of selling residential projects before construction even begins.

RERA Act will not allow developers to test the markets by going for pre-launch sales. They would prefer to rather build a part of the project and then sell it to buyers.

With the rising preference, ready properties sale of which have risen significantly in the past year, compared with under construction projects. Customers progressively choose to buy complete project due to increasing uncertainly in the real estate market. In this way, RERA will remove the pre-launch stage and force developers to launch a project under the new guidelines only once all approvals are in place. This is believed to be a safer approach since cash outflows will be limited during the pre-constructions stage. This will help maintain fixed funds for timely completions of the project.

The developer plans to adopt this model in the two or three projects it has lined up for launch in the near future. For the buyer it gives him the comfort that the project will be completed in time.

Delhi-NCR is likely to have the highest demand in LIG, MIG and HIG segments in the period 2016-2020. Delhi/NCR continues to save the highest ratio of demand of 24 percent at around 1 million units by the end of 2020.
LIG housing is the most under-serviced segment, below Rs 15 lakhs. While the LIG is probable to generate demand of about 1.98 million units by 2020, supply by private developers is going to be just 25,000 units.

Similarly, though the MIG (Rs 15-70 lakh) accounts for 63% of the total housing supply across eight cities between 2016 and 2020 at 647,000 units, the demand is likely to be a much higher at 14,57,000 units. Lack of funds and high land and development costs are the primary reason for developers not choosing for smaller sized units closer to city centres as profitability radically reduces.

There is a considerable ratio of unsold inventory in the MIG and HIG types, which are not engaged as these properties are unable to demonstrate value for their buyers. Such units fall out of preference either on account of higher-than-expected prices or due to locations.

Delhi-NCR is expected to have the highest demand in all the three segments in the period 2016-2020. However, a majority of the supply is likely to cater to the HIG, followed by the MIG and LIG.