India has been one of the rising stars in the world economy in recent years, booming in industry, IT, filmmaking and numerous other ways, one of the two big beasts, along with China, of the developing world.
The Indian property market has been booming alongside this overall development in various ways, be it real estate India as new building takes place, or the buy-to-let that is made possible by the growth of the middle class and the popularity of many areas with tourists.
Among India’s advantages is that it is the world’s largest democracy. Among the disadvantages is a lack of regulation in key areas, including real estate. This, of course, can cause problems for builders, which in turn can impact the property market in the country.
However, this is all about to change, reports Forbes, as the government has responded to calls for better legal protection in this area. S Jaipal Reddy, the urban development minister, told reporters this week: “A quasi-judicial regulator is required in big cities as both consumers and builders may need protection,” adding that “we will set up a regulator in Delhi which would serve as a model for other states to emulate.”
The report adds that the body will be set up inside the next six months, although it will not be a nationwide body as, Mr Reddy noted, land regulation is a matter of state-level jurisdiction. However, the pressure to eliminate malpractice throughout India is likely to grow, according to Jonathan Yap, chief executive officer of Singapore-based Ascendas Trust Fund.
He said: “If India wants public investment, fiscal regulation needs to be in place. There needs to be a clear structure for taxes and proper titles. There’s a fair bit of things to do.”
Yet India does appear to be moving in the right direction in this regard. It has just moved up 12 places in the rankings of the nations listed in the World Bank’s 2008 edition of Doing Business, reports the Economic Times.
This still places it 120 out of 178 on the list, which indicates it has some way to go, not least with China well ahead at 83. But, the report notes, it has provided better credit access for business, better cargo rights and electronic registry for security rights. In short, business regulation is improving and should continue to do so. World Bank investment policy specialists Sabine Hertveldt told the paper: “We expect the India ranking to go up further next year, since a lot of the reform processes are pending.”
So with the prospects looking good for improvements in regulation and legal protection, those involved in the property market in India may find that the amount of red tape and difficulty drops for them too.
Opportunities abound in India for investors. For example, Homesgofast.com reported yesterday that deals available include off-plan two-bedroom apartments starting at £23,958 in Rudrapur, just as a special economic zone is being set up just outside the city that could help the properties appreciate rapidly in value.
Thus the investor in Indian property may be able not only to enjoy grabbing some bargains now, but having easier and better systems to deal with as their involvement with the country continues into the future.