Amid the pandemic, while residential property prices dipped at many places across the country, Hyderabad witnessed the opposite. Not just did the cost of buying residential flats in many areas of the city go up, sales also witnessed a massive spike. According to Anarock Research, the city witnessed sales of approx. 6735 units in Q3 2021, which is over 300% more than Q3 2020.
In the last 5 years, the average price of property per sq.ft has gone up by just 6.8% from Rs 3968 to Rs 4240 per sq.ft, according to Anarock Research. However, in some major micro-markets of the city, particularly West Hyderabad, the average price of a residential flat is up to Rs 5600 per sq.ft.
At many residential projects in prominent localities like Gachibowli, Hitech City, Kondapur and Manikonda, builders are quoting Rs 6000-Rs 7000 per sq.ft. So much so that for buying even a small flat of 1000 sq.ft, you may end up spending up to Rs 70 lakh or more for all costs, including registration stamp duty and GST. That size of the flat is also hard to find in a large and reputed project as the focus now is on constructing spacious flats. But the cost of such flats could go beyond Rs 1 crore.
Interestingly, to provide a cheaper alternative to home buyers, a lot of stand-alone buildings are coming up in the city. Many of these buildings are not registered under RERA but have the approval of HMDA (Hyderabad Municipal Development Authority). This leaves a lot of uncertainties in minds of buyers as to whether they should overlook RERA registration while going for cheaper flats? Will they face difficulties in future if buying homes in non-RERA projects?
Experts say that projects falling under RERA could be a safe bet for buyers because of the safety net provided by the law.
According to Santhosh Kumar, Vice Chairman, Anarock Group, all projects proposed for development having an area of more than 500 sq. m. of land or having more than eight apartments are mandated to be registered under their respective state RERA. Hence, even in Hyderabad any project of this size and above also need to be registered under RERA. Only projects smaller than these can be sold without RERA registration.
“Ideally, projects falling under RERA are a safe bet for buyers because it provides some sort of a safety net for them in case the developer fails to adhere to the timeline or construction quality etc,” Kumar told FE Online.
Are all non-RERA projects bad for you?
RERA-registered projects are considered a better bet in case of an under-construction property as the law safeguards buyers’ interest in case of any default.
However, if someone is buying a ready-to-move property, there are several other factors that need to be considered. These include builder’s reputation, project completion and handover certifications from HMDA, location, construction quality etc. Without completion and handover certifications, it would be difficult for a buyer to get the property registered in his/her name.
“One must do their due diligence before buying any property and certainly see the builder credentials and his previous track record. One must not just get lured by lower prices because it may later prove to be very expensive,” said Kumar.
Also, it can’t be said with certainty that all non-RERA approved projects would be a bad bet for homebuyers.
From a legal perspective, HMDA approvals offer the comfort that basic building and layout permissions are in place. RERA registration (if applicable) adds that extra cushion of extending protection to the buyers, including for the resolution of any disputes, as well as placing more responsibility on the builders, according to Rakesh Warrier, Partner, JSA said.
While buying a new residential property, the reputation of the builder should also be looked at.
“Reputation and market standing of the builders would also be a key consideration. Therefore, it may not just be about choosing one over the other. The assessment would need to be undertaken taking into consideration all the factors. The general guidance from real estate bodies (like CREDAI, TREDA, etc) has been that buyers should look at RERA approved properties,” Warrier told FE Online.
Nitish Sharma, Counsel at AnantLaw said HMDA was set up for the purpose of planning, co-ordination, supervising, promoting and securing the planned development of the Hyderabad Metropolitan Region. The Real Estate (Regulation and Development) Act, 2016 (RERA Act) on the other hand includes, among its many regulations, a provision for the establishment of a state-level Real Estate Regulatory Authority (“RERA”). The founding objective of this body is to monitor the real estate sector and adjudicate disputes related to real-estate projects.
“HMDA approved properties must operate in harmony with the provisions stipulated under the RERA Act, as RERA is the superior authority that regulates HMDA. RERA comes into operation when there is any default with respect to the provisions. However, a buyer must carry out thorough compliance before cashing in his/her hard-earned money before booking a commercial/residential unit,” said Sharma.
Is it a good time to buy a new home?
According to Kumar, for buyers genuinely looking to purchase homes, it is a good time to buy. Many developers are offering deals and discounts while home loan rates are also at their lowest best.
“However, amid the current rising inflationary trends of raw materials such as steel, cement, labour cost etc. will sooner or later compel developers to increase property prices,” said Kumar.
from The Financial Express https://ift.tt/3e3QecP
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