10 Things Homebuyers Await In 2018

The year 2017 has been an eventful year. The industry has seen some new reforms that were meant to positively change the real estate sector, but, there are factions that believe otherwise.

Here's what 2018 should bring along to ensure that the property market recovers and becomes a more stable market for the homebuyers to invest in:

Hurry up with the real estate law

Homebuyer could not wait for the law to arrive. However, they remain disappointed from it so far.

*The Real Esate Regulatory Authority (RERA) has not been created in all states yet. Homebuyers demand a full-fledged operational website for easy use.

*Every homebuyer in every states should be made aware of the RERA website link that they should trace if they want help.

*States that have reportedly diluted the provisions of the law should be identified at the earliest and rules should be in place so that the homebuyer is confident that the time to buy is right.

*The Maharashtra RERA has included details about litigations that the developer is into. Other states need to follow this example to make the law effective.

*While the law may be giving one last chance to developers to complete the project, it has taken a toll on many homebuyers especially in micro-markets of the National Capital Region (NCR). According to a report, there are 33 lakh families affected by project delays across India.

Clear the air around Goods and Services Tax 

One of the biggest tax reforms, the Goods and Services Tax (GST) has solved many problems but is still a cause of confusion for many. Some of the common problems that homebuyers face include:

*There have been instances of developers charging/over-charging homebuyers in the name of the GST.

*Buyers need to be made aware of the benefits of the GST and at what stage and when can they claim the benefits of input tax credit.

*Since real estate has so many components, both goods and services, the various rates should be made known to buyers.

Finance Minister Arun Jaitley recently also hinted that if revenue stabilises, GST may be brought down to only three slabs. Further rationalisation of rates may be expected with taxes applicable only on luxury and demerit goods. However, this works out only if the intended revenue numbers are met.

Insolvency should not impact homebuyers

With Jaypee Infratech being declared insolvent, buyers across various micro-markets have become insecure. Project delays have been rampant and various developers have defaulted time and again. With timelines crossing beyond an average buyers' financial security, it becomes important that the Insolvency and Bankruptcy Law should look at the homebuyer as a financial creditor. As of now, buyers are the last in the lot. Once liquidation takes place, the proceeds first go to cover these costs. Thereafter, it goes to the labour engaged, banks and other financial institutions. Employees of the company and the government is then paid their due. The homebuyer, unfortunately, can partake his share only after all this.

Mind the infrastructure lags

As a country of more than a billion, our infrastructural needs are ever-growing. However, the many approvals lead to a delay in these infrastructural projects. From planning to implementation and execution, these projects take years to complete jeopardising the liveability quotient of the area. Further, construction and related issues in localities further make living around it a problem.

Let's give you some numbers. At the beginning of the year, 94 projects of the 1,186 projects are lagging and also show cost overruns. These are projects with an investment of Rs 150 crore and over. Some of the common reasons of delay include the issues related to law and order, the delay in land acquisition, the geological conditions, the delay in no-objection certificates and clearances, the rehabilitation and resettlement, and the contract-related issues.

Amend land acquisition

Delays related to land acquisition are aplenty. As already mentioned, this needs to be looked into given that most infrastructure projects undertaken in the country have significant funding from the government coffers. In April 2017, the Cabinet had passed the Requisitioning and Acquisition of Immovable Property Act, 1952 which will take into consideration the cost variation of land when they are sold due to non-completion of projects by the government.

The Hyderabad Metro, the Jewar airport, 10-laning of the Mysuru-Bengaluru Road, the bullet train among countless other projects are examples of how land acquisition delays can thwart project implementation deadlines.

 Balance the digital game for convenience

As per research by IMRB International, as of December 2016, 432 million people in India had access to internet services. Over 900 million are devoid of this 'luxury'. Hence, it becomes very important and yet challenging for authorities to strike a balance for this mix of population. The municipal corporations are going digital, apps are being launched to track and monitor how swachh your vicinity is. But the bitter truth is clear. With projects such as Smart Cities, the government should be able to bridge this divide.

Favourable budget

Homebuyers and industry bodies are all vying for a favourable budget that is to be tabled for  FY 2018-19. FICCI, for instance, has proposed an across the board tax rate cuts for individuals and businesses that would leave them with more domestic investment and spending power. This is important given that especially after RERA and GST when developers have higher compliance costs and prices that were stagnant for a long time may now go up. With high tax slabs for the working and business classes, real estate investments may not look inviting for many.

Finance Minister Arun Jaitley had said that this year's budget would concentrate more on rural areas and infrastructure. This would necessarily boost investments too but a greater thrust should be on job creation as well, say experts. A favourable job market can encourage a secure investment climate.

GST rates could be further rationalised as well. The banks were quick to roll out the benefits of demonetisation in the form of cheaper home loans. Homebuyers expect that Budget 2018 would be a high point for them too.

Fix liveability across cities

For real estate to thrive, liveability needs to be addressed. For example, Chandigarh's draft parking policy that speaks of hiking road tax for luxury car users and second car owners and a slew of other measures is a lesson that cities like Delhi, Bengaluru and Mumbai should take note of in the face of air pollution, poor urban planning and unmanageable migration.

 Ensure law to protect NRIs

The non-resident Indians or NRIs find India a healthy ground to invest in. However, recent cases that involved offenders selling land or property belonging to NRIs in their absence calls for a strict action. In Goa, a new legislation is being talked about and will soon be discussed in the assembly. It may mean that the NRI himself would need to be present at the sub-registrar's office to register the sale deed unlike the common practice wherein the power of attorney holder does it on the NRI's behalf. The coming year should see more such law that would protect NRI homebuyers.

It was also seen that NRIs are taking to commercial property as residential properties are being looked upon as a risk avenue. Authorities and stakeholders would need to ensure that the residential segment gains ground.

Rating for developers, brokers and housing development boards

In India, there is no system of rating and ranking brokers and real estate developers. The award functions that celebrate a few developers for their quality product are not a standard either. If RERA seeks to direct homebuyers to quality construction, it should also start with a ranking system basis the developer's track record of quality and consistent deliveries.

Brokers too have been asked to register under the real estate law which is a good move but quality brokers should be highlighted too.

The housing development boards in each state should be accountable for not just what they bring to the public at slightly nominal rates but should also be held accountable for the liveability standard that they develop in and around.