Real Estate Sector in India- The Fish Market Syndrome

Purchasing property in India is no less than or even worse than a visit to the fish market. The ambient noise is very high and akin to the doubts which one has about the freshness of the fish stock, as an investor you are always doubtful whether you are purchasing the right property or not, even after due diligence and having gone through the entire documentation. The trust deficit is so high that the insecurity never gives way to confidence. In the past few months even the branded names in the real estate sector in India have been sucked into controversies and irregularities have been reported against them. The fear of getting cheated and manipulated leads to this insecurity as the financial stakes involved are high.

The worst part has been that the real estate sector has remained oblivious to this ever increasing trust deficit, treats it with contempt and has shown no sincerity or obligation to initiate remedial measures. It was thought that the present recession in the real estate sector would force the key players to overcome this dogma which has plagued the sector for long.  However, very little has been thought of or done on this aspect. Infact the slow-down has further exposed the unprofessional side of the real estate sector, with projects being delayed, unilaterally being foreclosed and the investor being taken for a long uncomfortable ride. Akin to the fish market which always stinks due to even a few bad fish, the real estate sector somehow has never been able to initiate a clean-up act.  

The real estate in India has built an autocratic, brash, stubborn and arrogant image for itself over the years and live by the ethos that ‘they can get away with anything’. Unfortunately, nothing has changed and the sector is not ready to shed any of these tenets even in their days of crisis (since 2013 onwards). Even, the government has done little to try and change this image and get some method in the madness. Certain agencies are taking up the issues which plague the real estate sector, through redressal in some individual cases, however organisational reforms are lacking. Main reason for this has been the close linkages of political families with real estate developers which makes them feel like Gladiators, who cannot be conquered. Till the time this poltico-mafia-real estate linkage is not broken this state shall continue, real estate slow-downs can come and go.

Unfortunately, there are many players and MNCs who want to change this image of the real estate sector, however, the ‘power’ lies elsewhere which is not under their control. In the bargain individual small time investors are the end sufferer with real estate developers doing what they feel like and the administration conveniently closing their eyes.

Real estate is one sector in India which has an undying demand with an ever increasing population and migration of this population towards towns and cities in search of better livelihood. The real estate mafia, if it may be called so, has been exploiting this aspect for years and beyond. Like the fish market cleans up itself periodically to get rid of the stink, it is high time the real estate sector adopts the same process to get its act together.