Indian Real Estate Moving Towards Greater Transparency
As Prime Minister Narendra Modi announced the demonitisation of Rs 500 and Rs 1,000 notes, the real estate sector has moved an inch closer towards transparency. There is no denying the fact that realty estate is the haven to park unaccounted money, but the historical move is expected to burst the artificial price bubble and bring down the prices.
“The banning of higher currency notes is a major move which will help curb unaccounted-for cash. The effects will be far-reaching and immediate. This will help bring about greater transparency and give the Indian real estate sector more credibility,” says Dr Jagdish Basu, President, CREDAI Karnataka.
Indian real estate has been an attractive investment proposition for domestic as well as global investors, owing to unending demand and unlimited opportunities for all stakeholders. Easing up of foreign investment norms, setting up of real estate regulatory authority, simple procedures and laws for land acquisitions are few policy measures that have made this possible.
According to recently published Global Real Estate Transparency Index, Tier-I cities of India were ranked 36th in transparency levels while Tier-II and Tier-III cities were positioned on 39th and 52nd spots, respectively.
This clearly indicates that Indian real estate has come a long way. But is this statement valid for a regular home buyer?
Maintained land records bring transparency in land acquisition process
As the land records and files have started to be digitised, an online database is being created so that genuine owners can get listed and can receive compensatory benefits during the acquisition process. This entire process is set up to simplify the procedure for acquiring land and sellers get fair compensation on time which was earlier misled by the middlemen.
Online activism, social media projects real-time image of developer's reputation
Potential home buyers are using the internet to find out developers' track record. A brief search on World Wide Web is enough to understand the reputation of a developer these days. In fact, to take the buyer-seller relationship to the next level, developers are conducting open houses where a prospective client gets to meet the existing ones and get a fair review from them.
Social media: Social networking sites have become a platform where buyers come together to share their grievances against the builder.
Tip: If you want to check a developer's past record, do check out their social media channels. A grieved buyer usually takes a stand publically and you might get a cue about developer's past.
Consumer forums: There are many consumer forums where complaints are filed against the seller. Some of these forums also act as a solicitor to resolve the case out-of-court.
Tip: Scan through consumer forums to check past complaints filed by home buyers.
Local organisation/buyer's association: Home buyers usually form associations to share grievances against specific builders or projects. Check online if any such organisation exists against your shortlisted project/developer.
The easy availability of information has forced developers to improve their service quality not just to be safe from negative publicity but to stand out in the competition which will bring them in a positive light in media.
Real estate consultancies play a major role in establishing the credibility of developers. These consultancies give ratings to projects on the basis of parameters such as financial feasibility, location, construction quality, building material, design, etc.
Star ratings provided by these consultancies actually provide a transparent angle to project development and developer's track record. Serious buyers often consider these reports, especially when the cost involved is too high.
Who can be a better verifier than the bank which is loaning you for the property? Usually, banks do not provide loans to those projects which do not have due approvals in place. They are of great help in deciding how safe your investment is.