Around 70 per cent of consumers are aware of realty law RERA and five out of six homebuyers seek grievances redressal through this legislation, according to a survey by Omidyar Network India and Boston Consulting Group released on Wednesday.
However, the report pointed out that the implementation of the grievance redressal process still has many gaps as "only 22 per cent of the consumers involved in a grievance redressal process were satisfied due to the uncertain timelines involved".
The Real Estate (Regulation and Development) Act, 2016, was passed by Parliament in March 2016.
Omidyar Network India (ONI) and Boston Consulting group (BCG) has launched a survey report -- 'Five Years On: An assessment of RERA - The Road Ahead for a Stronger On-ground Regime' --- that gauges its impact on the crucial real estate sector since its enactment five years ago.
The report is based on the interactions with over 1,300 customers, developers, regulatory authorities, and relevant stakeholders like chartered accountants, engineers, and architects from Maharashtra, Uttar Pradesh, Madhya Pradesh, Orissa, and Karnataka.
The survey found out that the law has created an implicit trust in homebuyers because of the usage of RERA registration of properties as a marketing tool and creation of escrow account for each projects to park customers advances to build projects.
According to stakeholder perspectives, RERA has been effective in increasing consumer confidence and greater accountability.
In its survey findings, the report suggested that around 70 per cent of consumers surveyed are aware of RERA but it is limited to main benefits. Among those who are aware of the RERA, 71 per cent are satisfied with the law.
"76 per cent of consumers who were aware of RERA only plan to buy RERA-registered properties. Five out of six consumers seek redressal through RERA," the report said.
Among developers, 64 per cent of those surveyed were highly satisfied with the RERA authority. 77 per cent of all eligible projects have been registered under RERA.
The report said that 55 per cent of developers surveyed were also able to secure loans more easily due to RERA.
However, the ONI and BCG survey pointed out that there is a lot of work to be done to streamline the understanding of the provisions of RERA, increase stakeholder confidence through greater transparency and improve the grievance redressal process.
"30 per cent of consumers surveyed were still unaware of RERA's role as a regulator. 1 in 2 (50 per cent) consumers reported being aware of just two benefits of the Act -the mandatory registration of the relevant projects and RERA as a grievance redressal forum," it said.
Only 14 per cent of all potential homebuyers have visited their relevant RERA site, and 24 per cent of these consumers said that they were satisfied with the online experience. "45 per cent of all developers surveyed reported dissatisfaction with the RERA website," it said.
With RERA now having been implemented in 26 states and UTs, this data also urges state RERAs and other policy stakeholders to build on consumer education and awareness, streamline processes and drive adherence across states; evaluate and steer policy-level shifts and thereby, facilitate growth and promotion of the sector.
Commenting on the report, Shilpa Kumar, Partner, ONI, said, "An average Indian household maintains 75% of all its assets in real estate. Combine this with the fact that 66% of civil cases in India are on land & property disputes, and it is obvious that RERA has a critical role to play." The report shows that in the last 5 years, RERA has begun moving in the right direction, increasing consumer confidence in the real estate sector, Kumar said.
"However, the report also points to need for more focus on greater consumer awareness, better RERA websites & focussed grievance redressal to further improve consumer confidence in the sector," Kumar said.
Neetu Vasanta, Managing Director and Partner, BCG, said it is great to see the boost in consumer confidence that has been created by RERA over the last 5 years in the Real Estate Sector.
"However, there is still headroom to improve customer experience and unlock efficiencies in the sector by bringing in increased transparency and systemic accountability. A well-executed RERA can further improve private investments by 5-7% and potentially create 4-6 million additional jobs in the sector and related industries," she said.
