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.