Third black swan in real estate business.

Excluding some ups and downs here and there, the real estate business has been a strong market to invest in. These downs include third black swan. There are more than sufficient examples to prove that if you know about the business and indulge in it at the right time you can make the tables turn for yourself. People who have not made big investments have also managed to get profits. If you compare to other businesses, the real estate business has seen less down times. It mostly has been profitable. But in the recent past the business has seen its fair share of lows.

Real estate business.

What is the third black swan?

Real estate (Regulation and Development) act is the third black swan in the business. It came into existence in May 2016, by the parliament of India. Soon after six months demonitisation hit the country. It hit the industry because of the difference of circle rate and the market rate by the government. The RERA act implementes by only a few states. The idea behind it was to gain the confidence of home buyers because for that implementation of RERA was important. Home buyers complained for a long time about the lopsided transactions and how they were heavily in favour of the dealers. So, considering this the Parliament of India decided to come up with this solution. But this had numerous loopholes in it. Rules and regulations in the new bill was not applicable for projects that were on-going. Delay from the government agency in approval and clearance may hinder the timely delivery of projects. Small developers (1000 square km) are not even in this act. Their registration is not necessary. Without clearance, projects cannot be launched and launching of new projects may get delayed. But, eventually the RERA act was not able to hit the industry so severely.


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