National Association of Realtors (NAR), an apex organisation of real estate brokers in the country, is working towards developing a live
property valuation index, which will become the benchmark for real estate deals in the country.
NAR President Ravi Varma told TOI that the brokers' body has almost concluded talks with the National Housing Bank (NHB) for development of such an index. The NHB is the norm-deciding body for all housing finance institutions (HFIs). "We will soon formalise the arrangement and start developing the index for which data collection is already under way," Varma said.
Under the mandate from NHB, the brokers body will develop Residex' which will be an index similar to the stock exchange index that will reflect the valuations of home properties in different locations across the country.
Varma said Residex will be a quarterly indicator of property prices that will come in handy for HFIs to assess the correct value of a property they are considering to finance. "The index will also act as a guide for property buyers," he added.
Varma informed that initially, the exercise will be of an experimental nature and will eventually become a benchmark for property valuations for the HFIs.
"This is a set practice in matured real estate markets, like the United States, and with globalisation of India's realty sector the index has a relevance here as the international buyers are asking for information based on statistics and future expectations about returns," Varma said.
NAR has begun an exercise to expose its members to the new valuation methodology by inviting international experts to conduct workshops across the country. An effort is on to involve local real estate brokers' bodies like the Estate Agents Association of Pune (EAAP) to introduce best international practices to the members, he said.
"As a part of this ongoing initiative we are focusing on undertaking various programs with support from international agencies for empowering Indian realtors to adopt best global practices in their functioning," said Ravi Varma, president of the National Association of Realtors, India.
"In this process we are taking help from organisations like United States Agency for International Development, International Real Property Foundation and the National Association of Realtors, USA. Moreover, we at NAR, India, are also taking special efforts in customising the best international practices to suit the practices prevalent in the Indian market," he added.
EAAP president Govind Bhagchandani said, "The realisation to develop and nurture fair, transparent and internationally benchmarked valuation practice is gaining momentum in the country and to equip realtors in Pune with the right and scientific valuation process, EAAP in association with NAR, India, undertook a special training drive, where over 150 realtors in Pune were trained in professional valuation by Gheorghe Badescu, an international real estate valuation specialist from USA."
"We feel that we are now better equipped to evaluate properties based on scientific and well-articulated norms. Credible valuation will surely help in creating a transparent and fair real estate market and will also help in inducing confidence amongst investors and property buyers," added Kishen Milaney, vice-president of EAAP.