Realty Check | Day 14 | Shashi Kumar: Real Estate needs a regulator

26 Aug,2014

By Shashi Kumar
President, Wholesale Lending, DHFL

 

The new government has created a euphoria increasing the velocity at least in places like Navi Mumbai, Chennai and Bengaluru. The stockmarket has gone up and there’s a lot of excitement and positivity in the realty sector. Having said that, I also believe there are a lot of changes that have to come into this sector.

 

Firstly, housing is a very common man’s problem and therefore there must be a central body which should govern it. Even though it affects the entire country, it is a state subject and therefore depends a lot on the ruling party in each state. For example, there are some states which are regressive and some which believe that it has to be controlled in some particular function. That hampers growth.

 

Internationally, some developers are good in building hotels where as some are good in building malls. Some are good in dome shapes while some are an exception with their plans for 10 thousand acres of land. They have expertise in doing that and hence have a common strategy. Unfortunately, if you come to India, one developer is good in some state but not so good in another. There’s no cross border value being added.

 

Secondly, every person in this country needs a house therefore the demand is very high. But the customer is always at the receiving end of all issues be it the delays of approvals, high cost of finance, etc. There are regulators keeping a check on the prices in other sectors like telecom and insurance but not so in the real estate sector. Neither the government nor the developer takes the onus. The entire brunt has to be borne by the customer.

 

The Prime Minister has very enthusiastically spoken about affordable homes and I think a lot of bodies are being set up and if all of them come under one body then that in itself will give a boost. Neither of this will be successful if the government is not party to it. They can’t just leave it to the private sector. Acquiring land, building and selling it at a price which is unaffordable can’t happen unless the government makes it very clear that these places are only for affordable houses.

 

However inspite of this, I definitely feel that there’s a strong and positive wave in the sector and everyone including customers, developers and financial institutions will be watching this space very eagerly for the coming months.

 

Coordinated by Shobhana Nair

 

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