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India jumps one place to take 35th spot on global real estate transparency index

The country's rankings likely to improve further  on the back of RERA, policies for land title insurance and strengthening of Benami Transactions Act and the sector aligning itself with the GST regime

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India has moved up one place to claim the 35th spot on JLL's Global Real Estate Transparency Index (GRETI) aided by improvement in market fundamentals, policy reforms, and liberalisation of FDI. Digitisation of property records and industry status accorded to affordable housing have also helped.

India has also shown incredible improvement in the latest survey and emerged as one of the top 10 countries to register maximum improvement in transparency in real estate over last two years. The country has moved up five places since 2014 or over last two cycles of JLL’s GRETI.

India's marked improvement remains unmatched in comparison to countries with similar market size that are also part of the same “semi-transparent” group. Among BRICS countries both China and South Africa stayed on the same 33rd and 21st ranks, respectively, as in the 2016 assessment. Russia also remained confined to 38th rank but Brazil slipped to the 37th spot.

"India’s remarkable improvement in the transparency scores across all markets has started to benefit the nation in the form of increased volumes of international capital being deployed into the country. Improved market fundamentals, policy reforms and liberalisation of FDI into realty sector and retail and strengthening of information in public domain were main influencers, along with digitisation of property records and assigning “industry status” to affordable housing. Tools like “PropTech” and “BlockChain” are becoming an integral part of realty sector and use of technology is only going to add transparency into the sector,” says Ramesh Nair, CEO and Country Head, JLL India.

“The country's rankings is likely to improve further in GRETI 2020 mainly on the back of the comprehensive implementation of the Real Estate (Regulation and Development) Act in all states of India, introduction of insurance policies for Land Title Insurance, pseudo-ownership of properties weeded out through Benami Transactions Act and the sector aligning itself well with Goods and Service Tax (GST) regime,” he says.

Private equity investments into realty sector are one of the best indicators of the confidence of the investor community and the confidence is closely linked with the transparency of the property markets and improvement in transparency. In India’s case, where the transparency index rank moved up by five places in last two editions of JLL-GRETI, a rise in private equity over these years clearly reflects the growing confidence and comfort of the world best and large PE Funds.

PE investment in Indian real estate has grown in every year from $2.2 billion in 2014 to $4.7 billion in 2015, to $6.9 billion in 2016 and it was $6.3 billion in 2017. This year too, handsome investment activity is expected that will continue to demonstrate the improving transparency of India property markets.

India’s task is cut out for entering the Transparent Markets defined by ranks up to 30 by executing the reforms well and fast by the time of our next assessment in the year 2020. The index measures transparency by looking at factors including data availability, its authenticity, and accuracy. Governance- of public agencies as well as stakeholders of the realty sector, transaction processes and costs associated with those, and the regulatory and legal environment are also considered.

India is one of top ten countries showing maximum improvement in transparency score. In the semi-transparent market that India belongs to and in the transparent market that India aspires for, countries such as the Netherlands, Thailand, UAE, Serbia have better improvement in scores than India, while Slovakia and Thailand have the same improvement in score as India.

India needs to back itself and continue its journey towards creating a transparent, accountable and respectable realty sector that the best talent aspires to make careers in.
First Published on Jun 28, 2018 04:23 pm
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