According to a report published by Liases Foras, an independent non-broking real estate research company, the average time taken to complete construction work up to first floor after launch of a housing/real estate project has come down significantly from the time RERA (Real Estate Regulation and development Act) has been enforced. At present developers are taking an average of six months to complete work up to first floor slab. Historical analysis shows before 2016, average time taken to complete first floor after the project had been launched, used to be 21 months.
According to the report, among tier-I cities, Mumbai Metropolitan Region witnessed the maximum drop (of 63%) in the median timeframe (from 15 months to 5 months) between launch and completion of first floor slab while Chennai witnessed minimum drop, that being 27% (from 10 months to 7 months) between 2016 and 2018. Maximum construction delay was noticed in NCR and Kolkata in the past among tier-I cities.
It may also be noted that with enforcement of RERA in 2017, builders have increased the pace of construction in many of their projects in order to avoid registering these projects under RERA leading to a sudden jump in floor space construction in 2017.
“RERA has come as a boon to not just real estate industry but to the economy as a whole,” the report notes. According to the report, increased accountability of developers has given boost to the cement consumption as well. Cement is not just a major material in building construction but also an indicator to the growth in construction and allied industries.
Improvement may be attributed to government initiatives such as ease of doing business, faster approvals, quicker dispute redressal, among others. “But RERA is definitely proving to be a game changer for the industry,” says the report.