Housing trust: Regulations required in real estate sector
Experts urge framework for safeguarding investments
Experts urge framework for safeguarding investments. PHOTO: REUTERS
LAHORE:
Once seen as a robust investment, real estate has devolved into a litigious mess with little to no government oversight or regulations in place.
This has deterred investors, especially those who cannot afford to buy from expensive sellers, from injecting equity in the housing society.
Unlike trading in stocks, which needs technical knowledge, doing business in real estate is far easier and, until recently, less risky.
Investors can broadly fall into two major groups. The first group would be inclined to invest in some trusted housing authority, which these days needs more capital for reasonable returns. The second group comprises of small-medium scale investors who do not have much capital in hand and cannot hold their investments for long periods of time.
For the second group, the announcement of new housing societies, preferably by renowned developers, is actually a chance to raise their capital strength. For many developers, the demand for registration forms for plots by the market, before or at the ground breaking announcement, may set the path of success or failure of the project.
However, market experts say the trust of investors is crumbling due to lack of regulatory oversight by the government. Such oversights hold developers accountable for selling excess plot forms than the actual land holdings, huge delays in on-ground developments, price manipulation via their cohort dealers, little town planning measures and years of delay till possession is handed over.
“Investors are now cautious when investing in such projects, no matter how big the developers are,” said Waseem Tariq, chief executive officer of F-1 properties. “In recent months, investors have preferred to invest in land, rather than in those housing societies which were doing business in thin air.”
For Tariq, such housing societies might be the growth engine of the real estate market, given they deliver exactly what they promise and that too within the stipulated time frame. Unfortunately, this is not the case.
The market is almost stagnant and investors are demanding regulatory oversight. “Regularisation of the sector is impossible without a body in place,” said Zameen.com CEO Zeeshan Ali Khan. “We repeatedly emphasised upon the importance of this because fraudulent practices and factors that result in unnatural hikes simply cannot be tackled any other way.”
Published in The Express Tribune, December 4th, 2015.
Once seen as a robust investment, real estate has devolved into a litigious mess with little to no government oversight or regulations in place.
This has deterred investors, especially those who cannot afford to buy from expensive sellers, from injecting equity in the housing society.
Unlike trading in stocks, which needs technical knowledge, doing business in real estate is far easier and, until recently, less risky.
Investors can broadly fall into two major groups. The first group would be inclined to invest in some trusted housing authority, which these days needs more capital for reasonable returns. The second group comprises of small-medium scale investors who do not have much capital in hand and cannot hold their investments for long periods of time.
For the second group, the announcement of new housing societies, preferably by renowned developers, is actually a chance to raise their capital strength. For many developers, the demand for registration forms for plots by the market, before or at the ground breaking announcement, may set the path of success or failure of the project.
However, market experts say the trust of investors is crumbling due to lack of regulatory oversight by the government. Such oversights hold developers accountable for selling excess plot forms than the actual land holdings, huge delays in on-ground developments, price manipulation via their cohort dealers, little town planning measures and years of delay till possession is handed over.
“Investors are now cautious when investing in such projects, no matter how big the developers are,” said Waseem Tariq, chief executive officer of F-1 properties. “In recent months, investors have preferred to invest in land, rather than in those housing societies which were doing business in thin air.”
For Tariq, such housing societies might be the growth engine of the real estate market, given they deliver exactly what they promise and that too within the stipulated time frame. Unfortunately, this is not the case.
The market is almost stagnant and investors are demanding regulatory oversight. “Regularisation of the sector is impossible without a body in place,” said Zameen.com CEO Zeeshan Ali Khan. “We repeatedly emphasised upon the importance of this because fraudulent practices and factors that result in unnatural hikes simply cannot be tackled any other way.”
Published in The Express Tribune, December 4th, 2015.