Summer Internship Project Report

On
Impact of RERA Act on Real Estate Industry
Consumer Buying Behaviour

Submitted to, Prepared by,

Dr. Kaushal Bhatt Divyarajsinh Zala

Associate Professor,
208390593067
GSMS,
GTU. MBA (IB) SEM - 3
Flow of Presentation

 Introduction of RERA Act in construction industry

 Market Stats of construction industry
 Covid-19 Impact on construction industry
 Advantages of RERA
 Research Methodology
 Data Analysis
 Findings
 Conclusion
 Learnings from SIP
 References
Introduction of RERA Act in Real Estate

 RERA stands for the Real Estate Regulatory Authority. This was formed to bring
about transparency in the real estate sector. The RERA Act was brought in to
eradicate problems within the sector. It aims to reduce project delays and mis-
selling. At present, it is compulsory for all builders or developers to carry out RERA
registration before they start a project.
 RERA gives protection the interest of the allotters and safeguard their
responsibility.
 RERA preserve transparency and reduce the probabilities of fraud.
 To increase the movement of correct info between the home purchasers and the
sellers
Market Stats of construction industry
 The construction industry GVA share accounts for 7.3% in FY18.
 Share of infrastructure spending in the construction sector as a part of India’s GDP rose to 9% in 2017.
 India stands as the second largest employer, employing more than 49 million people in the sector.
 The Indian real estate sector is expected to reach a market size of $ 180 billion by 2020.
 The Construction industry is expected to record a CAGR of 15.7% to reach $ 738.5 billion by 2022.
 Foreign Direct Investment (FDI) received in the Construction Development sector (townships, housing,
built-up infrastructure and construction development projects) from April 2000 to March 2019 stands
at US$ 25.05 billion.
 Institutional investments in Indian realty touch $ 4 billion in 2018.
 Construction output is expected to grow on average by 7.1% each year.
Covid-19 Impact on construction industry
 For the major part of 2020, the construction sector in India was overcoming the labor shortage and
supply chain disruptions of their raw material.
 The construction sector is one of the largest employers of the workforce in India. COVID crisis-affected
8.5 million jobs in this sector.
 The sector was battling previously from the liquidity crunch in the wake of the fallout of the NBFC’s in
the financial sector in 2019. The situation started to improve in 2021 as the industrial operations were
getting back on track. There is a pressing need for the home construction and maintenance industry to
renovate the existing spaces.
 The work-from-home format seems to stretch for the entire 2021, as India faces a dreadful second wave
of the pandemic. People are turning their temporary spaces to meet the needs of a home office. We can
expect a surge in demand for the home renovation, maintenance, and interior designing sector.
 66% of the construction firms in India are eyeing digitalisation by learning the best practices from the
developed markets. Union Government identified the pandemic as a Force Majeure incident. This will
help real estate developers to extend the registration and completion date for all registered projects by
six months.
 It will also provide time to developers to raise new financing or debt for completing their pending
projects The statistics below are taken from Industry data available pre-Corona virus impact.
 Advantages of RERA
Industry Developer Buyer Agents
•Administration and • Collaboration and • Greater purchaser safety • Increased clarity
transparency excellent practises
• Excellent items and • Increased effectiveness
• Project efficiency and • Increased efficacy prompt delivery
• Minimal trial by adopting best
reliable project
• Sectorial union • Stable contracts and care practises
execution
• Commercial branding • Transparent – sales • Merging of sectors (due to obligatory
• Governance and
established on carpeted state registration)
excellence • Increased investment
floor
• Increase shareholder • Increased organised
• Money security and
trust finance
operational transparency
• Attract more capital
and PE finance
Research Methodology
4.1 Statement of the Problem
Prior to the establishment of RERA, purchasers were constantly concerned that the manufacturer would fail to
provide control on time, or that he would fail to supply the needed paperwork, or that he would fail to provide the
stated superiority of property. so there was trust gap between buyers and builders so for that RERA is implemented
for eliminating trust gap between buyers and builders so this study help to find RERA impact buyers behavior or not
after post RERA.
 
4.2 Objectives of the study
To Study how RERA is going to affect consumer buying behavior while buying a residential property.
To study RERA is provide protection and transparency for home buyers or not.
 
4.3 Significance of the study
RERA is a regulatory organisation that will change the real estate sector as a whole. This research is necessary in
order to understand customer behaviour while acquiring a residential property property. Every research has a
unique role to play in resolving business and industrial issues. This study will aid real estate developers and agents in
understanding the purchaser's perspective on purchasing a real estate investment. 

4.4 Sample Size

208 Respondents
4.5 Sampling Method
Simple random sampling technique, Convenience non-probability sampling method
 
4.6 Data Collection Method
Secondary Data
Secondary data is collected from various secondary sources like internet browsing of different websites.
Primary Data
Primary Data is collected through questionnaires.

4.7 Data Collection Instrument

Self-administered questionnaires are used to collect data. The majority of the questions are objective in
nature and are presented as multiple choice options.
 
4.8 Period of the study
Period of study is 5 weeks during work done is collecting data, analyze of data, separate useful data and
drawing out conclusion.
 
4.9 Hypotheses of the study
This study is designed to assess the hypothesis that change is come or not in buying behavior of consumer after
implementation of RERA act in real estate industry.

4.10 Tools and techniques of Analysis

In this study, use several types of graphs and tables to show the result of the data which will be analyzed.
 
4.11 Limitations of the study
The data reability and credibility will be change as per situation as well as from place to place.
Up to some extend data collection may bay bias through survey method because the respondents may have
perceived anonymity and social desirability.
The data may be not reliable because the sampling is done by non-probability method and random sampling
method.
 Data analysis
Preference of different parameters for selecting house
Above table shows consumers perception of selecting
house on different parameters on the basis of ranking
from 1 to 5 where in number with parameters first
Rank
number denote rank and second number denote number Parameter Total
of respondents where parameter (1) Brand name 1-49, 2- 1 2 3 4 5

59 , 3-54 ,4-19 ,5-27 (2) Location 1-74,2-57,3-23,4-42,5-12 Brand Name 49 59 54 19 27 208

(3) Price 1-48,2-29,3-96,4-13,5-22 (4 ) Builder’s past
Location 74 57 23 42 12 208
record 1-39, 2-41, 3-23, 4-87,5-18 (5) Amenities 1-58,2-
16,3-20,4-26,5-88. So from above numbers majority of Price 48 29 96 13 22 208
respondents give Rank 1 to location and then amenities, Builder’s Past
39 41 23 87 18 208
Rank 2 to brand name and then location, Rank 3 to price Record
and then brand name, Rank 4 to builder’s past record and Amenities 58 16 20 26 88 208
then location and Rank 5 to amenities and then brand
Total 268 202 216 187 167 1040
name most of consumer prefer location and what
amenities of the house before buying house and then they
prefer brand name and price of house and also consumers
give less preference to amenities for buying house.
X2= ∑(fo - fe)2 / fe

X2 = 387.162

Alfa = 0.05

D.F. = (No of column -1)*( No of row -1 ) =(5-1)*(5-1) =4*4=16

X2TAB = 26.296

X2CAL < X2TAB

387.162> 26.296

Hypothesis Testing
So Null Hypotheses is rejected. Alternative hypotheses is accepted. There is association
between different parameters and rank for selecting house.
 Age
Buyer’s age and their action against builder for Reaction Total
20-30 30-40 40-50 50+
something wrong action
File a
12 20 11 5 48
Here above tables shows the relation between buyer’s complaint
age and their against builder for something wrong Demand
action (a) Age group 20-30 has 46 responses where 12 for
persons file compaints,20 persons demand for replaceme
20 53 19 12 104
replacement,11 persons demand for compensation and
nt
3 persons don’t know what to do (b)Age group 30-40
years has 102 responses highest among all where 20 Demand
persons file for complaint,53 persons demand for for
11 21 5 3 40
replacement,21 demand for compensation and 8 don’t compensati
know what to do (c) Age group 40-50 years has 38 on
responses where 11 file for complaint,19 demand for Don't
3 8 3 2 16
replacement,5 demand for compensation and 3 persons know
do not know what to do (d) Age group 50+ has 22 Total 46 102 38 22 208
persons lowest from all where 5 say they will file
complaint,12 demand for replacement,3 demand for
compensation and 2 persons don’t know what to do.
X2= ∑(fo - fe)2 / fe

X2 = 3.6921

Alfa = 0.05

D.F. = (No of column -1)*( No of row -1 ) =(4-1)*(4-1) =3*3=9

X2TAB = 16.92

X2CAL < X2TAB

3.6921<16.92

Hypothesis Testing
So Alternative Hypotheses is rejected. Null hypotheses is accepted. There is no association between
buyer’s different age group and buyer’s reaction
Findings
• Total no of respondents are 208 where most of consumers lies between middle class age 30-50 years.
• Majority of respondents are male and also most of them are highly educated with graduation and post-graduation
degree.
• Majority of respondents occupation in service sector and they are earn annually up to 5,00,000 rupees.
• Majority of consumers prefer to check location, brand name and amenities before purchasing any house and by
hypothesis testing there is association between different parameters and rank for selecting house and also
consumers are required consultant before buying house.
• Most of the consumers want to see sample house before buying house and also consumers trust increase when
builders who are registered on RERA.
• Majority of consumers check project on RERA before buying house.
• Most of consumers want to go with well-known brand if it is not registered on RERA.
• Majority of consumers are comfortable with price increment of houses due to RERA.
• In case of misrepresentation of something on which was promised before and not delivered by builder that time
most of consumers are going for replacement and file complaint on RERA.
• Majority of consumer believe RERA protection to consumer for buying for property or house and also consumers
are believe their money is safe after possession with builder.
• Majority of consumers are believe that after implementation of RERA it is create transparency in real estate
industry.
• So from overall study we can see that trust of consumers under RERA increase in real estate industry.
Conclusion

Before implementation of RERA buyer’s facing issues in construction sector like lack of transparency,
fraud cases etc. so RERA is introduced by regulatory authority of India to safeguard the rights of
homebuyers while simultaneously boosting real estate investment.In the study majority of consumers
are lie between middle age where majority of them highly educated and consumer choose brand name
and location, see project is registered or not on RERA, go with reputed brand which not registered on
RERA, required consultation and see sample house before buying house. Consumers are ok with price
increment due to RERA, protection on purchasing property and also if any issue regarding builders so
majority of consumers demand for replacement otherwise they file complaint on RERA. Majority of
consumers believe their money is safe and transparency come in real estate under RERA. So overall
consumers buying behaviour is positive under RERA.
Learning From SIP

• How to avoid minor mistakes for making report.

• Create report in organize manner.
• Know about new thing like RERA what is its important for real estate sector.
• Work should be precise manner.
References

https://www.kanoon-e.com/blog/salient-features-of-rera/
https://www.maiervidorno.com/construction-sector/
https://housing.com/news/rera-will-impact-real-estate-industry/
https://www.ijert.org/review-and-analysis-of-rera-act
https://taxguru.in/corporate-law/compliance-rera.html
https://www.craneplus.in/news/Strong-Growth-For-Indian-Construction-Industry/771
https://www.maximizemarketresearch.com/market-report/india-construction-equipment-market/21117
/#toc
https://roofandfloor.thehindu.com/real-estate-blog/impact-rera-construction-industry /