Sans policy hurdles, there is another grim reality of the Indian realty beast that could prove to be its own undoing – there are oodles of black strings attached. The godfather of all of them is the black economy – dollops of black money involved in the sector has lead to lack of transparency in the real estate prefecture. Consequently, this has resulted in keeping heaps of multi-billion dollar FDI investments at bay and encumbering the sector’s augmentation. Dr. Tobias Just, Deutsche Bank (Research), Frankfurt explained to us, “Market transparency is still not satisfying. Data availability and data reliability are important and lack of data will translate to lower bidding
prices.”
As compared to global peers, the state of affairs in India is dilapidated. However, transparency levels have gone up, given the influx of more and more foreign money and ambitious IPO plans of domestic realty giants. Still, lot of orderliness is required. According to Jones Lang LaSalle, India stood in the tier-III level of transparency in 2006 one position up as compared to 2004 in the global real estate transparency index. Although, in terms of ranking, it didn’t see any movement, remaining in the group of back-benchers and standing at 41st position, well behind neighbouring countries like Malaysia.
So what steps should be taken to flush out this evil? Raman Sood is blunt, “It cannot be erased completely unless there is a political willingness.” However, the recent stricter norms put in place by SEBI for listing and foreign money pouring in should help clearing the darker side. The move will put a check on the fl y by night developers who merely fl oat companies to cash on the booming demand and towering estate prices. Nevertheless, the stricter norms in no way have depressed realtors’ listing plans. In the recent past, apart from the jumbo DLF issue, issues like HDIL, Akruti, Omaxe – all have received standing primary response from Dalal street (despite the realty index on BSE dipping pathetically).
prices.”As compared to global peers, the state of affairs in India is dilapidated. However, transparency levels have gone up, given the influx of more and more foreign money and ambitious IPO plans of domestic realty giants. Still, lot of orderliness is required. According to Jones Lang LaSalle, India stood in the tier-III level of transparency in 2006 one position up as compared to 2004 in the global real estate transparency index. Although, in terms of ranking, it didn’t see any movement, remaining in the group of back-benchers and standing at 41st position, well behind neighbouring countries like Malaysia.
So what steps should be taken to flush out this evil? Raman Sood is blunt, “It cannot be erased completely unless there is a political willingness.” However, the recent stricter norms put in place by SEBI for listing and foreign money pouring in should help clearing the darker side. The move will put a check on the fl y by night developers who merely fl oat companies to cash on the booming demand and towering estate prices. Nevertheless, the stricter norms in no way have depressed realtors’ listing plans. In the recent past, apart from the jumbo DLF issue, issues like HDIL, Akruti, Omaxe – all have received standing primary response from Dalal street (despite the realty index on BSE dipping pathetically).
For Complete IIPM Article, Click here
Source: IIPM Editorial, 2008
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative
Source: IIPM Editorial, 2008
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative
