The implementation of RERA increased compliance costs and took time as the states had to notify the rules. Hence, after a weak June quarter, September quarter net sales contracted by 23% year-on-year (y-o-y). RERA may in the long run see a shift from the unorganized to organized developers in real estate. However, given the weak sales and high working capital outlay required to complete projects, debt rose at some realty firms such as DLF. The second half of FY18 portends to be better, given that many firms are RERA compliant and home loan rates, too, are on the decline.

Source: Mint November 23, 2017 20:15 UTC