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By Dr. Sanjay Chaturvedi, LLB, PhD.
Once, 100 men went to jungle to cut woods. They took two women to cook the food. After a year, two men married the two women. Now statistician analysis and said “2% of men married 100% of women.”

Real Estate is not an industry in India. Hence there is no data or statistics. Even if there are some data, it is analyzed as the example cited above. For any business, we require to know and assess demand, need, utilities, competitors, costing, overhead and selling cost, cost of funds etc. But in real estate every research house claims the figures and data the most authentic one. We forget to validate the data compilation process. The investors are at risk by believing these false and baseless reports.
Take for example NHB’s Property Index, Residex. The base year for index is taken 2007. The boom year where the property prices were at top and historically high. India has more than 81 cities having population above 10 lakhs. The Index only shows data gathered for 20 cities that too residential apartment sale and only those transactions which financed by housing finance institutions. The outright sale or transactions without funding are having no place in the index. Data collection and validation process need more comprehensive and pragmatic approach since the apex organisation is accountable for many classes of the society.
Lets come to quarterly reports by International Property Consultants and Research Houses who are also adviser to government, state government, Municipal corporations and developing agencies and Prime Minister office. Each report contradicts its own statement. Graphical presentation of say Mumbai residential property trend cannot be achieved because there is no Indicator nor you can drive a mean of upper and power limit nor you can have period as comparison. Historic sale proceed cannot be indicator for other properties. Like for example Pugree system or cess building in south Mumbai will have less value than a newly constructed project. When NCPA was sold for Rs.1.5 Lakh pst, it cannot be treated as indicative price for that region. How can you co-relate Bombay Stock Exchange Sensex and Property prices of different location of a city on same graph?
Real Estate is a local business. One person buy and one person sells. How can you determine the cash portion involve in a transaction and documents registered for lesser amount? Do you have more intelligence then a Municipal Commissioner who also don’t know how tall your building would be because conditional CC are given in under construction projects. How can you count vacancy level when you do not know the old stocks are coming in market and competing with new stocks for commercial spaces? Since communications have decentralized the commercial activities, how can a research house claim that the occupancy level will be at a particular level when service industry still taking shelter in residential premises.
Selja Kumari, Kamal Nath and UD Secretary on the same dais citing three different figures for shortage of houses. Planning Commission in 12th five year plan citing different figure like 4.38 lakh houses are short, where as MCHI and CREDAI have taken pledge of provising 5 lakh affordable houses in MMR. That means entre India’s housing shortage will be provided for in MMR. ASSOCHEM claims that we are short by 47 millions houses and Housing Minister says 28.13 million short. If a builder wants to start a business and do Demand Assessment Research, it will be a zero outcome.
We are talking securitization of Real Estate through Mortgage Backed Security, Real Estate Mutual Funds and REITs. A daily NAV is ordered by SEBI for Real Estate Mutual Funds without understanding the nature of real estate investments.
I recall Birbal giving answer to Akbar on question of how many crows in the city, “…. Jahapanah, we have 1 million crows, if there be less : some of them must have gone to visit their relatives in other cities or for travel holidays and if More : relatives must be visiting them in our city.”