Tuesday 18th October 2016
Importance of CREDAI in Real Estate
Confederation of Real Estate Developers Associations of India (CREDAI) is a body that connects the Real Estate Industry to the government. Formed in 1999, it represents 9000 developers from 136 cities across India. It not only puts forth the government the real estate issues, on behalf of the member developers but also protects the rights of buyers by following stringent guidelines. It basically promotes the best professional practices among member developers and urges them to do their business ethically.
Being the a common body among buyers, developers, government and finance companies, CREDAI works for the development of real estate industry by facilitating transparency and curbing red-tapism and corruption. It was important to have a body that would know the real estate needs of the developers and buyers and present it to the government so that it could frame suitable policies. Since its inception, it has been catering to the needs of real estate industry. Some of the CREDAI initiatives that have fulfilled its purpose are given below:
1) Skilled India
Best skills are pre requisite for best results. If we have workers with professional skills in real estate, it will certainly lead to quick and better construction. Since real estate industry has begun to be recognized as a professional industry in India, it ought to have professionals working for it. CREDAI proposed the agenda of skilled India to the government which has been taken positively by it and Rajiv Pratap Rudy, the minister of skill development has said that he would welcome the skill development ideas from bodies like CREDAI to frame rules and regulations for the skill development policy. CREDAI is hoping to have special funds allotted exclusively for skill development in the budget.
CREDAI organizes conferences and summits where the top developers all over India meet and share their views and ideas for the development of Real Estate. In 2010, CREDAI organized a conference on “New Initiatives taken by the Government of Uttar Pradesh for Real Estate Industry”. Uttar Pradesh had a lot of scope for real estate development since many urban areas like Lucknow, Kanpur, Allahabad, Varanasi, Moradabad and Gautam Buddh Nagar had been growing rapidly. CREDAI had brought up a few areas where the U.P Government could work to ease the problems of developers and buyers. This summit of 250 delegates across the country was conducted by CREDAI to cover a wide range of topics concerning real estate development and put forward its ideas about what more can be done by the government. The ideas were communicated to the government, thereafter.
3) Expeditious Projects
One of the major reasons for slow pace of real estate industry is delay in projects. This delay causes a shrill drop in demand for property. When construction of lakhs of houses in Noida extension had been waiting for years to be completed, CREDAI took a step to expedite these projects by collecting database from all the builders in the area. CREDAI started to get the listed projects completed as soon as possible. Resultantly, 50,000 flats were expected to be handed over to people, which could led about 1,00,000 people to move in the area.
4) News Floatation
Since CREDAI is a sophisticated and reliable association of developers, any news floated by it will be trusted and acted upon. CREDAI announced that the construction of Delhi-Meerut expressway will hike up the housing and construction demand. The fact that the construction of highway will automatically encourage the real estate industry is not doubted but CREDAI’s statements develop a positive sentiment among investors which led them make better investments.
5) Abolishment of Urban Land Ceiling Act (ULCA)
ULCA came into existence in 1976 and stated that an individual could not own land in excess of 500 sq. metres in Grade A cities and 1000 sq. metres in Grade B cities. This was done to prevent the concentration of land in a few hands. The government froze all the land above the ceiling with the intention of acquiring it to run public projects. However, this idea did not prove to be appropriate and the land was blocked instead of supporting construction.
Pune witnessed 20-35% price hike since it repealed the ULCA which made it clear that abolition of this act would boost the real estate. Thereafter, CREDAI proposed the case of Maharashtra to government and urged it to repeal the act in entire Maharashtra to make way for real estate developments there.
6) Builder's Voice
CREDAI has always acted as builders’ voice when builders wanted to oppose the government provisions. In 2015, when builders had piled up unsold inventories, the RBI governor, Raghuram Rajan asked them to cut rates to increase demand. CREDAI reverted on behalf of builders stating that RBI must cut rates and taxes instead because it was not possible to lower the housing prices when the industry was already at its low.
Thus, CREDAI is an important weapon for developers, guardian of the buyers and advisor of the government!