Tuesday 10 September 2013

Why online real estate in India is less compared to other countries

The real estate industry in India has witnessed a time of great economic change especially in the last decade. It is truly brilliant at the rate at which India has risen from the ashes as compared to most other global economies after the Global Financial Crises. Though the economy in this country did manage to bounce back, but the question is as of today and now – understanding the current state of the real estate segment in India, is this industry prepared to use this quick recovery to its best advantage to be at par with some of the well established real estate markets like Asia Pacific and the USA?

To answer this question the ecosystem that comprises the real estate industry needs to be understood. There are architects, developers, stakeholders, government and regulatory authorities, banks, private equity players, buyers, property consultants and agents.

In India over 60% of the households earn an average of INR, 70,000 per annum, with almost 20% of the households cannot afford any type of housing through their income. Smooth access to transit and immediacy to daily destinations does not allow for creation of low population density in the urban areas which is dependent on self-acquired modes of transportation.

The unavailability of land within the cities has increased the infrastructure projects in the suburban areas in most of the metropolitan cities in India, with multiple residential and commercial developments dotting the skyline. This has led to increased unaffordability in land with residences coming up in the exteriors of the suburbs, thus impacting not just the affordability of the residential market prices but also the travel and recreational costs.

Neighbourhoods that make for poor transit lead to traffic congested cities, long commuting hours, higher air pollution, increased green house emissions and significant decline in open spaces. Vis-a-vis, neighbourhoods that are well connected are more efficient since they connect residents to shopping, work and recreation without straining or while limiting the strain on the available natural resources and on the public transit system thus making for better communities.

 In the Indian real estate information inefficient market, majority of the sellers tend to misrepresent and use unfair practices to sell to purchasers. Indian cities rank differently on various parameters of real estate transparency. Coupled with multiple taxes like service tax, valued added tax, minimum alternate tax, stamp duty, property tax etc., and unavailability of reliable and easy methods of property tax calculation with different regulations in different states makes it difficult for the buyer to make an informed choice. Add to that certain disputes in taxed being imposed onto real estate developers and purchasers.


Real estate brokers and agents are integral to this industry, but India lacks a national association to provide certified licenses to brokers and regulate their conduct through education and ethics. This has led to this particular sector being unregulated and unorganised, thus leading to high search time and costs for the online real estate purchaser.

3 comments:

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