Going by the developer’s remark, one wonders whether a real estate purchase can be termed as another expensive purchase. In a BMW purchase, for example, the buyer can look & feel the end product before one takes a final call. But in real estate it is only a promise and the product is yet to be produced.
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When the property market is hot, the sharks begin to circle; recognising the opportunity to fleece the rest of us out of our money. The problem with property scams (cartel of appreciation) is that they are hard to detect in advance and often perfectly legal. They are marketed convincingly and professionally, unlike the instantly recognisable scams we are used to in other walks of life. Property sharks are harder to pin down when the market is going up, but they are nowhere to be seen when the prices crashes.
Track2Realty Public Perception Survey, however, proves these assumptions wrong. More than half of Indians, as many as 54%, track the real estate news, analysis and launches even after they have purchase their house. Even more in number, 58%, monitor real estate sector and developers’ performance along with reputation for future investment purposes.
There is also a third set of buyers who buy properties in the second home locations as their first home. They are the buyers who look for locations that would be first home location in the next few years. Of course, the budget constraints force them to look for low-cost housing. Analysts believe this third set of buyers can not be classified as the second home buyers.
The Indian real estate market has always been notorious for its lack of transparency, and the changes in recent times has been less than desirable. As India aspires to get clean money into the sector, the foreign funds too have high standards in terms of service quality and clarity.
The memories of Uphaar Tragedy on the fateful day of 13thJune, 1997, that claimed the lives of 59 and injured over 100 people, have not faded from the public memory. But it seems the developers in this part of the word are not ready to learn any lessons. For them firefighting is a mandatory provision that just needs to be installed, irrespective of its functionality.
The Indian real estate developers are going over-board in capturing the fantasy of the rich Indians who are also expat professionals. But they seem to have gone completely off target when understanding the long-term housing needs of these Non Resident Indians (NRIs).
Till a decade back such was the mad rush for raising money in the capital market that even the real estate companies with limited presence in select micro markets started launching projects across the country to showcase a pan-India presence. Significant increase in housing demand, organized retailing and liquidity boom from 2003 to 2008, led to huge increase in land prices and real estate values and most real estate companies had a great run.
When the market sentiments were bullish and foreign investors were testing the Indian realty market, many of the relatively not-so-polished developers started hiring these white collared professionals to negotiate with their global counterparts in a language that they understood. Problem started when this skilled workforce started colouring the vision of the promoter and hence driving the management decisions.
RERA is one year old now and already the homebuyers are questioning the legislation, in the absence of any visible changes on the ground. The developers, on the contrary, feel RERA has already identified the challenges and hit the nail. Within the built environment the debate is inconclusive as to what extent RERA has brought in transparency and accountability and to what extent has it enhanced homebuyer confidence.