Attempting to fully get a handle on the real estate industry in India from our North American perspective may be an exercise in futility. You can try, but there’s no guarantee you’ll succeed. They’re two hugely different cultures, after all. 

A push in both Canada and India for greater industry professionalism

“Comparing India to Canada is not the right approach,” insists Re/Max India’s CEO and co-owner, Aditya Agarwal. Still, it’s fair to say that in both countries there’s a push to varying degrees for greater professionalism in the industry.

With around 1.45 billion citizens, India has recently overtaken China as the world’s most populated country, according to the United Nations. Real estate is one of India’s fastest-growing sectors. The economy is stable. The cost of living is low. The country has heavily invested in infrastructure development. Demand for housing is strong, with loads of growth potential.

Realtors in India can make “very good money” and so can their clients, attests Agarwal.

Look for ‘a new and different change in Indian real estate’ and a market ‘on the verge of rapid expansion’

The real estate industry in India, however, is highly unstructured and unregulated, although change has been underway in recent years. The legal framework and government rules “are stricter in substantial cities” like Mumbai and Delhi than in small communities, Agarwal notes. 

“In the last seven or eight years, the government has taken significant initiatives to regulate the market,” with the help of the establishment of a Real Estate Regulatory Authority in each state, he explains. “In the next few years, we will see a new and different change in Indian real estate.” 

Earlier this year, India Today magazine applauded the industry’s efforts to improve standards, stating in an article that, “Recent government reforms aimed at fostering accountability and openness have put the Indian real estate market on the verge of rapid expansion.”

India’s market ‘frontier-like’: NAR-India

Even so, the National Association of Realtors (NAR-India), formed in 2008, has been known to openly deem the country’s market “frontier-like.” 

This is where the Indian and North American worldviews can deviate. We tend to feel a “correction” is in order. Many of those living in India may disagree, content for the most part with the status quo. Lest we forget, India was exploited under colonial rule for close to 100 years —  a legacy that shapes the nation’s psyche in ways we can’t imagine.

There’s no standardized MLS in India. No mandated licensing or training of agents. Solid data for backing up sales prices and comparables may be lacking. Organized crime in the industry is known to be an issue. Regulatory complexities and bureaucratic hurdles abound.

Some feel industry is unorganized, more should be done

NAR-India could be doing more to empower the country’s realtors, Agarwal feels.

The legal framework can be poor. Especially outside the cities, there may not even be listing agreements, with the result that realtors’ unpaid commissions become lost causes. Buyers and sellers may use an agent or they may not, preferring instead to handle the transaction by networking with friends, neighbours and family. 

“It’s unorganized,” asserts Eldred Fernandes, who sold real estate on the side for a top builder in the state of Goa while working as a marketing professional with an Indian paints and sealants company, before moving to Canada. “Most people in India buy on trust.” 

They’ll pay a finder’s fee or divvy up a commission between the friends who assisted them. It can be similar for agents, with quite a few often involved in the same transaction, Fernandes continues. (In India, he adds, realtors generally require both the seller and buyer to pay 1.0 or 2.0 per cent commission.)

Industry inconsistencies with ‘huge potential to organize the sector’: An ‘enormous challenge’

Fernandes, now a Royal LePage agent in the Greater Toronto Area (GTA), still occasionally lends a hand in overseas transactions. In his experience, the new-build condominium market in India overseen by builders/developers in the concrete jungles of the big cities is “somewhat organized” (although it’s widely reported that developers differ greatly in terms of ethics).

This doesn’t hold for the resale market though, he feels, especially in small towns and villages.

“There are a lot of inconsistencies,” he states. “There’s huge potential to organize the real estate sector.” But it’s an enormous challenge. Corruption continues to be an issue, with some clients opting to do a hefty portion of deals under the table in cash to avoid taxes and other costs, he says. “How can the industry be regulated until that’s regulated?”

Many locals happy with status quo and don’t want change

While North American-based franchises have begun making inroads towards further professionalizing the business, some locals are leery of the offerings of the smattering of big Western-world brands that are infiltrating India’s vast market, Fernandes has found. Many are satisfied with the system as-is and don’t necessarily want change.

When Keller Williams Worldwide announced its expansion into India last year, company president William Soteroff remarked on the country’s “extraordinary growth and strong economic outlook” and explained that Keller Williams wants to “raise the bar of real estate service” in India to differentiate themselves from the rest.

Time will tell whether or not directives along these lines are something the nation will eventually embrace.