Financial Discipline Key to Real Estate Success: HRERA

New Delhi, Jul 10 (PTI) No real estate project can fail if developers maintain financial discipline from the very beginning, Sanjeev Kumar Arora, member of Gurugram bench of Haryana regulatory authority, said.

Addressing Assocham's National Conference on Changing Dynamics of Real Estate for Viksit Bharat, he also pitched for reduction of interest rates on home loans to boost demand.

"I believe no project can fail, provided the promoter tries to maintain the financial discipline from the inception of the project and tries to maintain a ratio of debt to equity... if financial discipline is maintained by the promoters since the inception of the project, no project can fail," Arora said.

He spoke about the role of the real estate sector in the Indian economy, especially in creation of employment opportunities.

"There is a need of rationalisation of interest rates, lending rates, because once the lending rates are reduced, certainly the investors or the homebuyers come forward. And builders are also happy to deliver at least possible costs," Arora said.

Talking about real estate law RERA, Arora, a member of Gurugram bench of Haryana Real Estate Regulatory Authority (HRERA), said about 1,25,000 projects have been registered under RERA since the enactment across India while 75,000 brokers also have registered.

Pradeep Aggarwal, Chairman of National Council on Real Estate, Housing and Urban Development at Assocham, said the sector is crucial to make India a top economy.

Real estate is a Rs 24 lakh crore market, and its GDP contribution is around 13.8 per cent, he added.

Urbanbriq Development Management Pvt Ltd Director Vineet Relia said there could be a downcycle if the government doesn't support this sector in the coming years with regards to affordability.