All this is set to change in 2017 — especially in the second half of the year. The passage of RERA by Parliament in March 2016 is set to improve disclosure and protect investors. Maharashtra is working on a RERA whereby the developer would have to furnish all project-related disclosures within 90 days from the commencement of the Act including certificates from the project’s architect, engineer and the chartered accountant as regards the progress of the construction and the actual cost incurred till date.
This, in turn, would allow the developer to withdraw money from the escrow account.
As per the existing draft prepared by the State, about 70 per cent of the money collected from the buyer of under-construction properties should be deposited in the escrow account. Such rules are expected to prevent siphoning of funds for other projects. Moreover, the draft mentions a standardised model “Agreement to sale”, which would leave little leeway for developers to make changes in its clauses.
The passing of the Benami Transactions (Prohibition) Amendment Bill 2015 by both the Houses is another positive. It is expected to bring unaccounted money into the system as well as lead to seizure of benami property. A crackdown on black money — by passing the above-mentioned two laws — is expected to bring much-needed transparency into the sector.
Moreover, the Centre’s recent demonetisation move will lead to slowdown in sales — especially in the resale residential market and land sales where a lot of transactions happen in cash. There is a possibility that your second home dream might come true, with softening of land prices, especially in the outskirts of the city.
Mumbai, Bengaluru, Hyderabad, Ahmedabad and Chennai are the places to watch out for in 2017, as per property consultant JLL India. Sarjapur and Kanakpura road in Bengaluru, Kharghar and Ulwe in Mumbai, Guindy and Alandur in Chennai and Gachibowli in Hyderabad are the micro markets to watch out for.
Residential property sales are expected to be lackadaisical over the next six months till the liquidity problem eases. However, it could also be the opportune time for realty buyers to get a bargain, by negotiating with reputed builders. Also, wait till the property comes under the ambit of the new law.
Credits The Hindu Business Line