Competition leads to lower prices, a wider choice of goods, and technological innovation , all in the interest of the consumer. Competition policy laws are designed to protect the competitive process either in a particular sector or across various sectors of the economy .Probably one of the best ways for a competition agency to be proactive is to enhance competition advocacy activities, as the experiences in developing and developed countries have shown.
In light of the substantial changes in the real estate market and consumers interest in a competitive real estate industry , Competition Commission of India (CCI) along with Hudco had recently organised a workshop to provide a forum on the competitiveness of the real estate marketing activities, aimed at expanding consumer welfare by promoting competition and correcting market structures and functions, which may impede competition in real estate sector.
Once it becomes operational , a consumer can file complaints in CCI against the other parties, if he believes that fair opportunity has not been given to him while pursuing a transaction.A real estate player can move to CCI, if he feels that his competitor took advantage of his dominant position in the market to avoid fair competition . However, to initiate any action on such complaints, CCI has to wait till it gets the actual teeth to act on such issues.
The issues discussed included the initiatives to be taken to further develop the real estate sector, the real estate transaction, empirical evidence regarding competition in the industry and actions that affect competition among real estate marketers among others.However , the Parliament is yet to enact a legislation after which CCI will actually start functions.
With stiff competition in the realty market and more than 3 million real estate agents besides a wide range of brokerage models working in real estate, competition has never been greater and consumers have never had wider choice with whom to work while buying and selling homes.
Today, home sellers and buyers are in the drivers seat when it comes to finding real estate services on attractive terms. This is a great time to look for a real estate consultant who will deliver the best service at the suitable cost.
What can you expect from your real estate advisor:
The real estate marketing personnel you work with could be one of your most valuable resource. As a buyer, you can expect the following services from your advisor, though these are not mandatory by any law:
* Your broker can help you decide house as per your budget. He can suggest ways to accrue the down payment and explain alternative financing methods .* In addition to knowing the local money market, he can also tell you what personal and financial data to bring with you when you apply for a loan.
* Should be familiar with current real estate values, taxes, utility costs, municipal services and facilities, and may be aware of local zone changes that could affect your decision to buy.
The poor regulation and the absence of any organised market for real estate means that the launch and the ongoing existence of such mutual funds will be a challenge. The poor state of the Indian property markets is well known; the true value of property is often unknown, liquidity is low and most transactions involve payment in ‘black’.
High stamp duties play a big role in dissuading property buyers and sellers from declaring the true transaction value of the property. Moreover, cities are poorly planned and regulations poorly enforced resulting in the proliferation of property that are either partially or completely unauthorised. Investment in properties with a doubtful title or legal standing can be a very big risk for such funds.
The lack of an organised market is also likely to hit the regulation of such funds. While the guidelines mandate daily declaration of NAV, it is not clear how the daily value of physical property held by the funds would be determined. The regulator has however done a wise thing by recommending a close-ended structure for these funds.
Considering the current state of the underlying market and the long gestation period of such funds, a close-ended structure is the right way to go about it. Sebi will also do well to work out the feasibility of introducing commodity-based mutual funds. Mutual funds that invest in diverse asset classes will give small investors the opportunity to diversify their investments.