The Real Estate Regulatory Authority (RERA), established to instill accountability and transparency in the real estate sector, is facing growing backlash for failing to check builder malpractices. Homebuyers allege that developers continue to flout pricing norms and construction standards, while the regulator remains largely passive—even in the face of formal complaints.
Builders Ignore Rules, Buyers Pay the Price
Despite rules mandating property sales based on carpet area, many builders continue to charge hefty premiums—demanding over 40% extra in on-money payments. These black money transactions remain widespread, with little evidence of regulatory intervention.
Super Built-Up Pricing Hides True Costs
While RERA’s official records peg residential and commercial property rates at ₹54,139 per sq m for 2024–25—a 35–37% increase over five years—actual market rates are much higher, ranging between ₹75,000 and ₹80,000 per sq m. Once super built-up charges are included, effective prices touch ₹1.10 to ₹1.20 lakh per sq m—almost double the official figures.
Commercial spaces show similar discrepancies. RERA data puts prices at ₹62,164 per sq m, but ground realities suggest a much steeper cost to buyers.
Middle-Class Dreams Fading Fast
For the middle class, skyrocketing property prices have turned home ownership into an increasingly distant dream. Builders justify price hikes citing “added amenities,” but these costs are passed on to buyers. In mixed-use projects, rates have soared from ₹35,785 in 2020 to ₹51,247 per sq m in 2024–25, while actual selling rates of ₹7,500–₹8,000 per sq ft (built-up area) have become the norm.
Rising Construction Costs, Higher Margins
Construction costs have undeniably risen—from ₹26,677 per sq m in 2017–18 to ₹40,691 in 2024–25, per RERA data. However, developers continue to apply significant markups in the name of design, lifestyle features, and exclusivity. Despite these trends, RERA has taken no significant steps to enforce detailed cost disclosures or pricing transparency.
Unsold Inventory Mounts, But Builders Stay Profitable
Since 2017, over 5,300 real estate projects have been registered in Gujarat with proposed investments of ₹1.93 lakh crore, covering over 8.38 lakh housing units. Around 2.5 lakh units remain unsold, but this hasn’t pressured developers to cut prices. Why? Because profits are so high that the sale of one unit often offsets the cost of another, enabling developers to hold inventory without urgency.
Large Projects Take Years to Clear
While smaller developments clear inventory within 3–4 years, larger projects may take up to 6 years to sell out completely. Experts argue that mandatory disclosure of land costs, NA (non-agriculture) charges, and actual construction expenses would reveal just how high developer margins really are.
Are Raw Material Costs the Real Culprit?
- Steel: ₹48,000/ton in 2020 → ₹57,000/ton in 2025 (+19%)
- Cement: ₹365–390 per 50kg bag in 2020 → ~₹360 in 2025 (stable)
- Aluminium & Glass: Up 50–60% since 2020
While some input costs have increased, they alone don’t justify the sharp spike in property prices, especially given the high-profit buffers developers continue to maintain.
A Regulator That Looks Away
The numbers tell a troubling story: property prices are soaring, but RERA is failing to perform its core function—regulating the sector. Instead of ensuring fair play, RERA is now widely viewed as being too lenient or inactive, letting builders set their own rules.
Until RERA enforces strict pricing norms, tackles illegal on-money transactions, and mandates transparency in cost structures, the promise of affordable and fair housing will remain just that—a promise.