Anand Kumar, the Chairman of Delhi RERA, has issued a cautionary statement to real estate developers, urging them to be vigilant against falling into the trap of investors. Speaking at the CII Conference on the ‘Evolving Landscape of Indian Real Estate: Trends and Future Outlook,’ Kumar highlighted the detrimental effects that investors can have on cash flows and project continuity if not properly managed.
Investor Trap Concerns
Kumar emphasized the risk posed by high net worth individuals who invest in multiple flats with the expectation of significant profits. He noted that these investors often default on payment installments after covering only a fraction of the total cost, leading developers to cancel units and subsequently engage in disputes with customers.
Importance of RERA Compliance
In response to these challenges, Kumar advised developers to promptly report any payment issues to RERA before they escalate. He underscored that RERA not only serves the interests of allottees but also provides mechanisms for developers to address payment delinquencies. Under RERA provisions, developers have the authority to cancel unit allotments in cases of non-payment, ensuring compliance and financial stability within projects.
Regulatory Measures
Chairman of Delhi RERA also addressed the issue of unauthorized developments, advocating for stricter regulation to optimize land usage and address housing shortages. By curbing unauthorized development, Kumar suggested that significant housing stock could be created within existing urban areas, alleviating pressure on infrastructure and promoting sustainable growth.
Opportunities in Non-Metro Areas
Sanjay Kulshrestha, Chairman and Managing Director of HUDCO, echoed Kumar’s sentiments, emphasizing the potential for real estate developers to explore opportunities in non-metro and smaller centers. He highlighted the government’s initiatives, such as the Pradhan Mantri Awas Yojana, aimed at boosting affordable housing and infrastructure development in these regions.
Growth Potential in Real Estate Sector
Neel C Raheja, Chairman of CII National Committee on Real Estate and Housing, emphasized the role of the real estate sector as a significant contributor to employment and economic growth. He highlighted the sector’s potential to double its contribution to GDP by 2047, underscoring the importance of skilling human resources and addressing skill shortages within the industry.
Conclusion
The cautionary remarks by Anand Kumar and the insights shared by industry leaders at the CII conference underscore the importance of proactive measures to address challenges and harness growth opportunities in the Indian real estate sector.
