Ficci-E&Y report calls for regulator in real estate space

A Ficci and Ernst & Young study has recommended setting up of a regulatory body for real estate and granting infrastructure status to housing.

The study – Realty Decoded: Investing Across Borders – will be released on Thursday by Union Minister for Commerce and Industry Anand Sharma.

Real estate players are however is opposed to a regulator and say it would be a deterrent for the sector.

The study also seeks liberal policies with regards to realty mutual funds and investment trusts, modification in foreign direct investment (FDI) norms for early exit and affordable housing and streamlining of the approval process for housing and real estate projects.

Amit Mitra, secretary general, Ficci, said, “Investors are returning to India with greater confidence. The future of real estate in India would significantly depend on investor-friendly policies and clear and transparent regulatory framework.”

The study notes that the strongest markets appear to be those in which controls have curbed excessive lending, speculative buying and instability. Controlled markets such as India and China have resisted severe downturns, while lenient markets continue their struggle to maintain stability.

“As the global economy continues to recover, real estate investors worldwide are poised to take advantage of investment opportunities,” said Ajit Krishnan, partner and national leader, infrastructure practice, Ernst & Young.

The study compares regulatory environment across nine geographies — India, China, USA, UK, Germany, Singapore, UAE, Brazil and Russia.

It ranks India fifth on account of a strong economic growth and a developing real estate market. With more focus on the regulatory environment, India has the potential to become a favored investment destination.