For many years there has been speculations, announcements, and rumors about establishing RERA (Real Estate Regulatory Authority) modeled on the one operating in the UAE. According to many estimates, not only a lot of illegal and black money is parked in real estate but due to this huge speculation, there is very less genuine growth in the housing sector. People with illegal, undeclared and ill-gotten wealth have parked their money in massive chunks of property. This property on the books is shown as massively undervalued whereas the actual value of the land is much fold of what is declared. This has taken away the ability of an average income household to own a piece of land and subsequently build a house on it. This has massive implications on the labor market, the building material manufacturers and other industries associated with this sector. The costs of land may have increased exponentially but the real growth in the sector has been dismal. Moreover, an average family is unable to afford a home and this has become a major challenge for the government in its inability to provide housing to its people.
Attempts were made back in 2012 to establish a real estate regulator but seem that these efforts were thwarted either by the inability of the government or by certain interest groups for whom this may spell disaster. However, yet once again the talk of a Real Estate Regulatory authority is again in the air. If this authority ever sees the daylight it would mean that there would be a complete record of all land holdings, the money trails, constant check on land prices and rentals, check and balances on speculations etc. In addition, there are certain very critical aspects of the functioning of a real estate regulator to protect the small investor and homeowner. A builder will be supervised during the constitution phase and a government-appointed engineer would supervise the project for its design, quality, the pace of construction and completions. Moreover, the builder will not be able to take the money from the allottees and use it to reinvest and complete the project later. The amount will have to be deposited with the regulator and will only be released upon proper certification.
Now the real question is what the current government will be able to implement RERA where all others were either unwilling or have failed?