Cabinet approves Real Estate Regulatory Bill: All you need to know - Firstpost

Very interesting proposals have been made in this proposal. If this Bill gets approved then many of the builders would have to make a decision before launching the project

Please go through proposed regulatory bill carefully - especially those who are about to book new units.
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  • In one way , it is good for the buyers since there will be more clarity in the buying process. It doesnt talk much about the agreements being one sided. however does this also mean it could lead to further increase in prices since there will be no room for pre-launch...
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  • This Bill appears more like a Grievence Cell setup than a regulatory one. It is incomplete without involving planning authorities, financing companies, administrative offices etc in its ambit. Asking a builder to quote price/carpet area will startightway result in marking up the rate/sqft by 20% also taking into account the increased cost of borrowing for builders and the liquidity crunch it will only result in increase of prices and less supply of good projects. Targetting the builder is not solution to the problem IMO. People who want to jump the queue and outbeat others to buy a flat will still go and give money to builders without approval. Builders henceforth wont take money as pre-launch but will start issuing bonds for the pre-booking amount you do. The government should focus on creating proper zones, faster sanctioning of approval, creating new rules to acquire land for township creation etc..
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  • all the project which didnt get OC will fall under this regulator..

    there are many project, in which did wrong doing,, they all come under this act..

    i know a builder in ggn,,, who built 12 floors( full const) and there is no EC granted to this project,,
    this attract criminal offence and 5 year jail in this offence,,
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  • Its good move but hold on.. This bill is yet to be discussed and passed in Parliament as it is. :)
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  • This is a reasonable bill to protect buyers. Hell with builders who have looted enough money so far to secure their generations from working hard.

    If this increases the price, people will not venture into RE unnecessarily...only those who are in need of houses will go for it and this can rationalize demand & supply to make it affordable for genuine end-users.

    For investors, delay in completion can be hedged through many ways...the bill need not care extensively about those types of buyers though their interest also to be protected but lesser extent than end-use type buyers.
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  • A good move
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  • Realty Bill to push up property prices by 40-50%: Brigade
    Realty Bill won't protect buyers; 50% price rise seen: Pros - CNBC-TV18
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  • Realty Bill won't protect buyers; 50% price rise seen: Pros - CNBC-TV18
    Realty Bill to push up property prices by 40-50%: Brigade
    Can the market absorb such artificial price increases?
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  • They can push the price to 400% if they want....this will reduce the demand naturally....
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  • I dont think it will decrease the demand. It can slow on a temporarily but people will keep buying what ever the price is. In my Opinion after seeing many slow downs and a temporariy pause the RE market picks up...!

    It will stop or decrease only when all Indian go job less. Until then no question of such.
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  • Originally Posted by nabishek
    This Bill appears more like a Grievence Cell setup than a regulatory one. It is incomplete without involving planning authorities, financing companies, administrative offices etc in its ambit. Asking a builder to quote price/carpet area will startightway result in marking up the rate/sqft by 20% also taking into account the increased cost of borrowing for builders and the liquidity crunch it will only result in increase of prices and less supply of good projects. Targetting the builder is not solution to the problem IMO. People who want to jump the queue and outbeat others to buy a flat will still go and give money to builders without approval. Builders henceforth wont take money as pre-launch but will start issuing bonds for the pre-booking amount you do. The government should focus on creating proper zones, faster sanctioning of approval, creating new rules to acquire land for township creation etc..


    WELL SAID, if you insist you can take booking only after approval instead of widely advertising a prelaunch they will do what BRIGADE is doing now, some thing called Soft launch take money pay a 9% interest and hold it for 6 months before launching
    Builders and Common public will circumvent and find loopholes and TOOTHLESS legislation is worse then no legislation
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  • RE business in nutshell have been conducted with OPM ( OTHER PEOPLES MONEY ) all along right from Land acquisition through JV, Sales or Time linked Payment to original owners rather than " few outright purchase and construction by few Reputed builders " .Construction activities on such lands too have been carried out only with old customers money, Advance received from new customers .

    If those Builders are asked to procure the land, receive all approvals and maintain 70% of receivables in bank, sell on Carpet area basis , they would never think of this business as they have been looting through obscure Super Builtup Area with inordinate dealy in construction, pending receipt of certain vital clearances , non transparency, inconsistency throughout the construction cycle.

    It is high time for those who indulged in such practice, to get out of the RE Construction business and pave the way for Quality ,financially disciplined and transparent builders to service the innocent customers .

    Hence weak players do not respect the RE bill have to go out and Strong players need to come in who respect the Bill approved, even if the price is bit higher.
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  • It is better for builders to go after investors upfront through some other options (like futures or commodity trading) instead of actually hedging the physical i.e Apartment Unit itself....this way, builders can get their funding from the real investors who understand RE business while, end users will benefit by getting the finished product at a reasonable or acceptable price.
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  • Originally Posted by Ramchi
    It is better for builders to go after investors upfront through some other options (like futures or commodity trading) instead of actually hedging the physical i.e Apartment Unit itself....this way, builders can get their funding from the real investors who understand RE business while, end users will benefit by getting the finished product at a reasonable or acceptable price.


    Exactly..I think with more streamlining we can have REITs, Managed Funds for specific projects etc. Many people like us as SR keeps saying will be more willing to buy/sell such a derivative as its more liquid holding than an apartment itself. Builders can also stop focussing on fleecing buyers to make profit. Having said that, This is only possible for big projects and townships..what about the small scale buildings and individual houses, this if enforced will drive away all the local builders who cannot keep up with the cost of following the regulation. Already we see it..Builders who are public price their projects higher than the local counterparts. In the long term, The focus of government should be making the houses/flat affordable..This can be ensured only by more supply and quick completion time for projects.
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  • Originally Posted by Ramchi
    It is better for builders to go after investors upfront through some other options (like futures or commodity trading) instead of actually hedging the physical i.e Apartment Unit itself....this way, builders can get their funding from the real investors who understand RE business while, end users will benefit by getting the finished product at a reasonable or acceptable price.


    Ramchi
    Wht makes you think the seasoned large builders dont do this,
    not sure how deep and spread but if a large builder is not hedging for currency fluctuations, Oil / Diesel prices, Seed investments from PEs or FDIs at competitive rates then they wont survive in this business.
    Capital, Raw material, Labor has to be hedged if not the project will be in soup
    Labor hedging is done via competitive sub contracting with fixed rates / milestones, outcome based payments, target based incentives IMO
    i have studied TOLL and NVR in detail the corporate governance and practices they undertake is simply amazing
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