RERA Boosts Completions of Housing Projects

The Real Estate Regulation Authority (RERA) Act, enacted in 2016  to protect the interests of home buyers, has come to the rescue of a large number of home buyers across India by helping to complete most of the housing projects launched between the second half of 2017 and the complete year of 2018.   

One of the primary aims of the Real Estate Regulatory  Act (RERA) is to safeguard homebuyers from the harrowing experience of delayed and stalled housing projects. RERA has lived up to this promise to a large extent

as at least 86% of residential projects launched in the post-RERA period from H2 2017 and the entire of 2018 are completed. Only the projects launched between H2 2017 & 2018 have been considered because on average, it does not take more than 5 years to complete most of the housing projects, with the exception of large townships.

According to Anarock data, out of a total of 1,642 RERA-registered residential projects launched in the top 7 cities during these 1.5 years, at least 1,409 are completed despiteexperiencing major headwinds like Covid-19 and supply chain disruptions of the war in Europe. Chennai saw the highest number (90%) of project completions among the top 7 cities. Out of 119 projects launched in the city between H2 2017 and the whole of 2018, over 107 are complete as on date.

Anuj Puri, Chairman – Anarock Group, says, “When it comes to ensuring timely delivery of residential real estate projects, RERA has delivered resoundingly wherever it has been fully deployed. The overall completion rate of 86% across the top 7 cities in 1.5 years  following RERA implementation is remarkable, especially considering the market circumstances prior to its deployment.”

Notably, these project completions took place during a period when construction activity was severely impacted by the pandemic-induced lockdowns. From H2 2017 onward, a ‘delivery at all cost’ approach has taken firm root, predictably spearheaded by the country’s leading developers. More than 4.02 lakh homes were completed in 2022 across the top 7 cities – the highest yearly completions since 2017.

While Chennai recorded the highest number of project completions at 90%, Kolkata saw the least at 70%. Currently, Chennai has the least available stock across the top 7 cities with approximately  28,300 units available for sale. Kolkata has, in all likelihood, trailed behind because RERA was not implemented in the state until late 2022. Moreover, when compared to the other major cities, real estate activity in Kolkata has remained relatively subdued.

For all the projects that remain incomplete across cities ,  there are various reasons. In some cases, there are large-size projects which take longer to complete. Then there are  projects by smaller developers which have been facing  liquidity and/or regulatory compliance issues. Amid soaring inflation of input costs, only financially strong developers are able to keep their projects on track. Progress on many projects has also been held back by the impact of the recent pandemic on construction activity.

City-wise Trends

The top 7 cities saw a total of 1,642 projects launched, cumulatively accounting for nearly 2,58,100 units in H2 2017 and the whole of 2018. Of these, 1,409 projects comprising 1,83,490 units have been completed so far.

• MMR saw the  most new launches between H2 2017 and entire 2018, with 679 residential projects comprising approximately 83,570 units. Of these, 602 projects (89%) are complete as on date.

• Pune recorded the launch of 393 projects in this period, of which . 350 projects (89%) are completeThe total number of units here stand at approx. 33,380.

•  Bengaluru  saw around 172 projects comprising about. 42,150 units , launched in these 1.5 years, of which 147 (85%) are complete.
• Hyderabad witnessed 110 project launches in the period, of which 81 (74%) are complete. The total number of launched units stood at approximately 24,215.

•  NCR, witnessed nearly 86 projects comprising around 34,520 units launched in this period, of which 64 (74%) are complete. One key factor behind NCR’s lower project completions is that the region also saw launching of some large projects l

• Chennai has been the frontrunner in project completions. The city launched 119 projects in the period, of which 107 (90%) are complete. The total number of units across all launched projects stood at approximately 20,900.

• Kolkata saw 83 residential projects comprising approximately 19,350 units launched between H2 2017 and entire 2018. Of these,  58 (70%) are complete as on date – lowest percentage share among the top 7 cities.