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Resi in India - RERA, consolidation & survival
2 MIN READApril 26, 2018
GRI Club India convened in Mumbai on 26th of April 2018 to discuss improvements in development standards and the future direction of residential real estate.

Co-Hosted by India Club Partner JLL and moderated by Ramesh Nair, CEO & Country Head of JLL India, GRI Club India members considered the impact of India’s 2016 Regulation & Development Act. The Act, which establishes a Real Estate Regulatory Authority (RERA) in each state, has been designed to protect consumers and boost investment.

It was generally agreed that the impact of the Act so far has been minimal. However, new classes of developers are beginning to emerge, divided between those focused on approval expertise and those focused on execution expertise, which is contributing to an improvement in development standards across the board.

The residential sector was at the centre of discussions, with mid and affordable offerings expected to drive demand in the very near future. There has been some market consolidation - more with respect to developers of greenfield projects and within stressed, ‘high demand’ cities such as Mumbai and Delhi NCR - as well as improvements in transparency across different sectors. There is also a growing contingent of foreign funds chasing distressed assets.

A market with stronger and fewer competitors has the potential to put a brake on oversupply. However, there is also a risk that continued consolidation might hinder innovation and product offerings, rather than help improve standards.

Conclusion

The full implications of India’s 2016 Regulation & Development Act remain to be seen. Whilst there certainly has been some consolidation and improvements in transparency across different sectors, there is still a long way to go. Most agreed that it remains imperative for developers to get into the affordable housing market space in order to survive.
 
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