Real estate and construction industry despite being the second largest employer in India is largely unorganized and fragmented. If not for the prolonged slump in the industry, developers might have continued with their old ways of doing business such as soft launch of residential projects without obtaining prior approvals, moving funds around from one project to another, not delivering homes on time etc.

The last few years have been bad for the real estate sector. Buyer confidence in developers is low and even the best of builders are finding it hard to sell homes especially in locations such as National Capital Region. Changing the way business is done is no longer an option. For sales to improve, developers will have to restore trust in the sector. One way to do this is by bringing in best practices such as launching projects after obtaining all approvals, delivering projects on time, being accountable to buyers.

Government regulations such as Real Estate Regulatory Authority (RERA) are meant to ensure that the industry adopts at least some of these best practices. RERA hopes to protect the interest of home buyers through provisions such as prior registration of residential projects and real estate agents with the regulator, transparency about construction of projects, launch of projects after receiving all prior approvals and by placing restriction on change in project plans without the consent of buyers.

The Act also makes it mandatory for developers to escrow a portion of sales proceeds for construction of the project to avoid diversion of funds by builders to other projects thereby ensuring timely delivery of homes.

Reforms such as mandatory registration of residential projects will help buyers because developers will have to disclose details of their projects on RERA’s website. Homebuyers can know the status of the land, site and layout plan, schedule for completion, names of agents, contractors, architects and details on approvals from various government agencies.

RERA will hopefully improve consumer confidence and give a boost to home sales. It also provides an opportunity to the industry to change the way it has traditionally operated by forcing them to become more accountable. RERA is possibly the biggest game changer for the industry. Regulation is likely to weed out fraudulent developers and make the Indian real estate sector on par with global developed markets.

The growth of technology is also aiding change in the industry. Online real estate marketplaces that facilitate sale and purchase of properties have introduced transparency in real estate transactions. For instance, Housing.com has a ‘construction update’ feature that provides home buyers timeline of projects under construction. Buyers can track status of all legal approvals of a project. Transparency in the online space will have a ripple effect on offline real estate agents and developers and will force them to bring in more transparency in their dealings.

As the industry changes, there has been a surge in demand for skilled professionals. Unfortunately, the real estate and construction sector has the highest shortfall in skilled professionals partly because there are not many educational institutions that offer specialised courses on real estate and construction sector. Meeting the demand for skilled professionals will be quite challenging.

RICS SBE Amity University is one of the few academic led institutions that offers specialised under graduate and post graduate courses in real estate, construction and infrastructure. The university’s graduates are job ready and find placement in leading companies in the real estate sector.

In light of the demand for skilled professionals, RICS SBE now offers training programs for mid-career executives as well. Not many know that chartered qualification for the real estate sector is gaining recognition in India. It is being seen as a benchmark for skilled real estate professionals. In fact, foreign investors prefer investing in projects that have chartered qualified professionals on board.

RICS is the only professional body in India that offers chartered qualification for built environment professionals. A year ago we launched a training program for 16 executives from construction giant Larsen & Toubro of which 15 received MRICS (Member of RICS) chartered qualification. An MRICS chartered qualification signifies that the professional works to the highest industry standards. This chartered qualification is given to real estate professionals based on their professional work experience and education.

RERA has called for the regulation of real estate agents as well. Agents will not be able to sell homes without registering with the state authorities. Clearly, the idea is to ensure accountability of all the key stakeholders of the real estate sector. Real estate agents are often the only interface between a developer and home buyer and it is important to ensure that they are well trained. But, they usually do not have any formal training in real estate.

With this in mind, RICS and National Association of Realtors (India) recently signed a Memorandum of Understanding (MoU) for a co-branded skills development initiative. NAR (India), is an umbrella body representing interests of brokers all over the country. RICS and NAR (India) will offer NAR members education and training programs under a co-branded skills development initiative. NAR (India) has an overall reach of 20,000 brokers across the country.

RICS-NAR (India) will offer Management Development Programs (MDP’s) for professionals with over three years of experience. The course will provide early to senior level brokers with an understanding of sales and marketing concepts, practices, importance and role of marketing with a special emphasis on the real estate sector.

RICS will also work with NAR (India) to promote standards for uniform property measurements (IPMS), brokerage and ethical standards in the real estate industry.

RERA and initiatives such as REIT’s (Real Estate Investment Trusts) have turned the spotlight on need for standards in the real estate sector. Indian real estate sector has been slow in adopting global standards. This is now changing with professional bodies such as RICS promoting standards for property measurement property valuation etc,

Change is a gradual process. The good news is the real estate sector is well on its way to transformation.

This article first appeared in Realty & More