Need For Reliable Real Estate Data

…..Vinod Behl

Authentic and credible real estate data holds the key to reliable demand- supply and pricing predictability for various industry stakeholders including developers, brokers, investors and buyers, to ensure a transparent stable and healthy real estate market. Especially in the case of residential real estate which forms about 80% of the overall real estate market in India.

Unlike some matured global real estate markets, India lacks a centralised mechanism to compile and share comprehensive and reliable data amidst lack of standardised mandatory reporting. This is clearly evident from the conflicting data dished out by leading IPCs and data analytics companies from time to time including the 2024 housing market data. As many transactions, especially high-ticket transactions still involve cash, the data pertaining to Home Price Index of IPCs and even RBI doesn’t show the real picture as it doesn’t capture real transaction values. The absence of fair data leaves scope for price manipulation.

Several regulatory reforms in the real estate sector including RERA, Benami Property Act and Demonetization have made the real estate market more transparent, professional and organised. RERA has even made it mandatory for developers to upload the data pertaining to housing projects launched by them, on RERA websites as well as on their company websites. However, despite these reforms, cash transactions have not been completely stamped out.

In the absence of credible and reliable real estate data, there’s no real assessment of demand-supply dynamics into play. As a result of this, we have often seen many developers adopting a herd mentality with regard to demand and supply, leading to inventory glut in the market. Even today in the NCR market we find that despite all the hype about the spurt in luxury housing sales, some developers are struggling with their unsold inventory, sweetening the deals with discounts and other sops even for ready-to-move homes which are otherwise high in demand, compared to under-construction homes. So much so that some developers are forced to offer easy payment plans like subvention schemes where payment of 70-80 percent of home price is to be made at the time of possession to offload their inventory.

Reliable industry data helps real estate stakeholders understand demand-supply dynamics for long-term healthy growth. It helps developers and their   marketing and sales teams effectively market and sell their projects. It also empowers investors and buyers by way of taking informed decisions, especially when credible and comprehensive data provides a reliable outlook for capital values and rental yields.

Dubai Land Department (DLD) generates accurate real estate data making use of a comprehensive system involving mandatory property registrations and use of data analytics tools and AI algorithms to generate accurate property valuation. Apex real estate bodies like CREDAI, NAREDCO and NAR should take a lead in this regard. Especially as NAREDCO is working under the umbrella of the Housing & Urban Affairs Ministry. They should join hands with authorities to generate industry-wide credible data to promote in-depth understanding of the sector for its long-term sustainable growth.