Impact of real estate developments on NRIs
The Indian economy is looking towards the upward trend and is poised to become better investment destinations going forward. The realty sector is the biggest contributors to the growing economy but it has lately been experiencing some downs and ups. The non-resident Indian segment, the biggest customer base for the Indian realty sector, has been troubled with the concerns like lack of transparency, execution and delivery delays, disappointing after-sales services, property quality, complex legal routes, misleading campaigns, etc.
But, over last 6 months or so, the scenario seems to actually have changed, all thanks to the introduction of the Real Estate Regulatory Act. The non-resident Indians have numerous reasons to invest in the real estate sector and the experts and developers do believe that the future certainly looks promising.
Real Estate Regulatory Act- boosting the confidence of NRI
Real Estate Regulations Act came into effect with 59 of 92 sections which are notified from May 1st, 2016 while other sections and provisions came into effect from May 1st, 2017. The non-resident Indians for long have been prime investors in real estate until the things got too complex and made it pretty difficult for them to buy and maintain the properties. Here, it is that the Real Estate Regulations Act comes in as the savior giving much-needed relief for the non-resident Indian investing in properties.
There are reported 16 million non-resident Indians and as per certain surveys, more than 40 percent of the non-resident Indians said that buying properties was their preferred investment. This goes only to show the intent, as well as the enthusiasm of the non-resident Indians, provided there is the promise of support and the advantage and this is where the Real Estate Regulations Act comes into play.
Actually, the act covers as well as addressing numerous non-resident Indians concerns and the experts believe that it will boost the confidence of the non-resident Indians for further investment into the real estate sector. Also, RERA provides clarity as well as the purpose of hugely unregulated realty sector where the developers have had the upper hand. The act has been put in place to make sure of the protection to the property buyers at large and that, of course, includes the non-resident Indians.
Advantages through RERA-
The biggest benefit of the act is that the developer or builder will have to register the project with the regulatory body and will require providing all details of the project on the website. This would allow the non-resident India to have a clear idea of what they are actually investing into.
Avoids delivery delay
The act makes sure that the developers are serious about delivery and they don’t overshoot the deadline. In the past, non-resident Indians have been subjected to the project delays as of which they had experienced substantial losses. Real Estate Regulations Act makes sure that the project is delivered on the tie as it certainly penalizes the developers on the delay.
Arrests misleading campaigns
The developers who have at times flaunted with the rules and mislead the buyers about property details can no longer do so as each detail concerning the project is submitted to the regulatory body as well as made available on the website.
Status and progress
The developers are needed to constantly give the status of the project and its progress. The non-resident Indians who have the difficulty of traveling to the site get the job done through Real Estate Regulatory Act which mandates the developers to post the information on the progress of the project.
The rules mandate that the developers place aside 70% of complete project cost in the escrow accounts. This makes sure that the money that is collected from the non-resident Indian is used for development of project ad not diverted towards any other purpose. Previously, some of the developers to take the advantage of the buyer investments as well as channeled similar into other areas but with RERA, their hands are actually tied up.
Villas on the radar
Due to higher earning and saving capacities, many of the non-resident Indians have shown some keen interest in the luxury properties as well as villas. In fact, the reports do suggest that non-resident Indians are among top buyers of villas and luxury homes in India. Numerous top developers across the country have made a foray into the villas.
As the income level grows, the non-resident Indians’ focus on the villas as well as luxury apartments is set to increase and with the Real Estate Regulatory Act in the play, it is being believed by the experts that scope and demand for villas are slated to grow in coming years.
Non-resident Indians for years have been playing the prime role as the investors in realty sector but at the same tie, they are subjected to numerous concerns which lead to the decrease of faith and confidence in the sector. The recent developments, RERA in particular, have made sure that non-resident Indians as buyers have many concerns addressed. The real estate sector is set to see some higher level of non-resident Indians’ investments thanks hugely to a clear, accountable, transparent and more professionally dealt realty purchase process post the Real Estate Regulatory Act. It is now safe to say that developments have actually begun to have a positive effect on the non-resident Indian segment.