The RERA Act was implemented in May 2016 with an aim to bring accountability and transparency into the real estate sector. Photo: Abhijit Bhatlekar/Mint
Mumbai: India has moved up just one spot in the global real estate transparency index from 36 in 2016 to 35 in 2018, despite the implementation of the Real Estate (Regulation And Development) Act or RERA, according to a report by real estate advisory firm Jones Lang LaSalle Inc. (JLL).
RERA was implemented in May 2016 to bring accountability and transparency into the sector. However, unlike a few states such as Maharashtra and Karnataka, several states have been slow in its implementation.
India is thus yet to figure among the transparent markets, despite the regulatory changes and the possibility of a Real Estate Investment Trust (REIT) listing.
The countries in the top 30 ranks have been defined as transparent markets, while those in the top 10 are categorized as highly transparent, according to the report that comes out every two years. The UK, Australia, the US, France and Canada are the top five countries.
The report, however, said that India is one of the 10 countries that have registered maximum improvement in transparency in real estate over the last two years. Since 2014, India has moved up by five spots from 40th in the global real estate transparency index.
The index measures transparency based on factors such as data availability, 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, the report said.
“Improved market fundamentals, policy reforms and liberalization of foreign direct investment into realty sector and retail and strengthening of information in public domain were main influencers, along with digitization of property records and assigning industry status to affordable housing,” Ramesh Nair, chief executive and country head, JLL India, said in the report.
The report also pointed out that a rise in private equity (PE) investments over the last four years is an indicator of the growing confidence large PE funds have in the Indian market. PE investment in Indian realty has grown every year from $2.2 billion in 2014 to $6.3 billion in 2017, according to the report.
“The country’s ranking is likely to improve further in GRETI 2020 mainly on the back of the comprehensive implementation of RERA in all states of India, introduction of insurance policies for land title, pseudo-ownership of properties weeded out through ‘Benami Transactions Act’ and the sector aligning itself well with goods and services tax regime,” it said.
According to Niranjan Hiranandani, chairman Hiranandani Group, India has definitely made efforts towards ease of doing business particularly in Mumbai and New Delhi. “It’s a very big top-down effort. RERA has brought about certain transparency. For instance, the facts and figures, approvals which were not available earlier to the common man is now available. While there is improvement, there are a lot of problems at the operational level where a lot of bureaucratic delays still take place but that is being sorted out now,” he said.