No entry barrier, no price barrier and no regulation in real estate

Track2Realty Roundtable-IV

Venue—India Habitat Centre

Moderator—Ravi Sinha, CEO & Managing Editor, Track2Realty

Panelists—Sachin Sandhir, MD, South Asia, RICS

                        Achal Agarwal, ED, Investments, Fire Capital

                        Sunil Dahiya, MD, Vigneshwara Developers

                        J C Khera, GM, Finance, Supertech

Sunil Dahiya: I agree over delay in project completion but you should also consider the speculations. If you go by the land authority act, every consumer is allowed only one home loan. He has to give an affidavit and only one house in his lifetime. Tell me one consumer who has gone for just one acquisition in his life time. So what has happened is that when speculators go shopping, they buy in bulk thinking half of them will be sold and the investment on other half will be recovered from that. People do not pay the installments on time. So the regulation has to be on both sides.

Sachin Sandhir: I will say this with a slightly different point of view. This is the only industry where there is no fixed MRP. Every time I go to someone, he is telling me it is for Rs 1100 per sq ft today and you should buy this today. The price is going up tomorrow by Rs 100. Till such time that a person can absorb the price, the developers keep increasing the price. So there is no fixed MRP for real estate.

Achal Agarwal: But that can happen in any industry. You can change your MRP any time. And the two issues we are talking about, consumer redressal and regulation, in my opinion these are the 2 sides of the same coin. The concern is that the consumer should not suffer. Whether it is through voluntary redressal system or through regulatory methods, but consumer grievances must be redressed. And the point raised by Mr Dahiya that the entire problem has come from the fly-by-night developers who have developed a block of 20 apartments and ran away the next day, bringing bad name to the entire industry. There has to be regulation to stop such type of developers. And once it comes into force, either by self discipline like it happened in Mumbai where CREDAI members have agreed to a code of conduct.

Sachin Sandhir: That is yet to be implemented and seems like a far cry to me. It was 6 months ago that Mr Lalit Kumar Jain had declared in a public forum that the members of CREDAI will adhere to a code of conduct but till date, only about 200 odd members have signed on to that from a member base of about 7000.

Ravi Sinha: CREDAI says members are willing to sign and so far about 20 per cent have signed.

Sachin Sandhir: It is a laudable thing that it has happened, set in the right direction. But there is a long way to go.

Sunil Dahiya: It is an indicator to change in mindset. So this is what CREDAI has set for the future, a marketing USP for the coming times and the marketing USP translates into competitiveness. But here the major point is policy gap.

…..to be continued