Notorious for allowing and legitimising the flow of black money, things are set to change as far as property dealings are concerned. With the launch of National Housing Banks (NHBs) Residex last week to track the price movement of real estate particularly residential housing for five cities, property transactions will now be totally white, heralding a new era for a hitherto unorganised sector.
?Deals will become more transparent and will bring into public domain the prices of property. Property deals will now involve white money and have nothing hanky panky about it,? says Rajeev Talwar, group executive director, DLF Ltd.
The index called NHB Residex was launched by finance minister P Chidambaram for Delhi, Mumbai, Kolkata, Bangalore and Bhopal, on a pilot basis. The index covers the movement in real estate prices over a period of five years on a spatial basis as well as by the size of the dwelling unit in each of these five cities. The year 2001 was taken as the base year for the index to be comparable with the wholesale price-based index and consumer price index.
The index shows an increasing trend of prices in all the five cities, doubling since 2001 and for Bangalore the rise in prices was almost three times. NHB proposes to extend the index to 35 cities having a population of more than one million in the next six months.
Apart from lending stability to the real estate sector, developers feel that the residex will also help in attracting more foreign investment. Says Sandeep Goel, MD, MSX Developers Pvt Ltd, ?The residex will ensure transparency and hence attract more foreign investment. As developers we foresee it as a benchmark in the booming housing market. It will forbid the developers in adopting malpractices and create a conducive atmosphere for enhanced FDI in the real estate sector.? However, some builders are worried about the index being manipulated by vested interests. ?There is a big question mark on how transparent it will be. The possibility of its manipulation is definitely a big concern for us,? says Vivek Srivastava, director (marketing), Collage Group.