Property in
India is probably the only investment which is also based on requirement.
Buying real estate in India is linked
to investment as well as self-use, it has a dual purpose and therefore it
becomes a complex issue. The parameters
for selecting property for self-use are different, as compared to, requirements
for investment. However, when these two have to be clubbed there is requirement
to balance out parameters which encompass both. From an individual investor’s
perspective property or real estate market in India has never been easy to
negotiate. The secondary market is predominantly driven by black money and
therefore it is never easy to find out the actual cost of a property.
The primary
real estate market in India is slightly more organized and is devoid of black
money payments at the investor end. However, it has its own complications in
terms of availability of clearances, sanctions, right of construction, time
schedules etc. The real estate market in India is corruption driven and
therefore is not investor friendly. The developer knows that investors are
driven by personal requirements for buying property and can be exploited very
easily due to this compulsion/helplessness.
The
developers have their own side of the coin; they are required to grease palms
for all the clearances and sanctions required, even if all documents are in
order. This requires un-accounted for (black) money to be pumped in. Despite
this one cannot rule out witch hunting, in case any official may want to
indulge in it, due to any reason. Such practices are also exploited by certain
developers/builders who are not clean and wanting to earn through mal practices,
by short-circuiting the normal procedure. The real state sector in India is
also plagued with a lot of red tape-ism which translates into a long
unpredictable lifecycle for any property project in India. This whole process has vitiated the real
estate environment in India and needs some real sorting out, before we see any
positive improvements.
The issues
are clear, on one hand the developers are struggling to get time bound
clearances/sanctions through the red taped administrative setup, earliest,
without paying bribes and in a legitimate manner; on the other hand, individual
investors are looking for surety that their investments are in safe hands. As
on date, both these issues remain unresolved making property purchase in India
akin to a game of gambling; where the chances of winning or losing are 50-50.
It needs to
be understood that no industry in any country can survive for long with this
kind of an arrangement. There is some serious introspection required at the
developer’s/builders end; as well as the administrative setup needs to refine
procedures, ease out process of doing business and rule out corruption.
The present
slow-down in the India property website
has forced some reforms to be initiated; however, it is a long road ahead.
