Asia Pacific made the greatest progress globally in terms of real estate transparency over the past two years, according to JLL’s Global Real Estate Transparency Index (GRETI) 2016. The index measures transparency by looking at factors including data availability, governance, transaction processes, and the regulatory and legal environment.
Asia Pacific is a diverse region in terms of real estate transparency. Australia continues to hold the top spot as the region’s most transparent real estate market, and together with New Zealand, is classified as ‘Highly Transparent’.
“India has made improvements in overall transparency scores across all markets, and has achieved higher ranks for tier-I, II markets. Improved market fundamentals, policy reforms, and liberalization of FDI into realty sector and strengthening of information in public domain were main influencers, along with digitization of land records and opening up of REITs,” says Anuj Puri, chairman and country head, JLL India.
India’s low score in transaction process (eg high costs of investment transactions, and weak professional standards for local agents) will improve during the 2016-18 assessment period of JLL’s next Transparency Index, on account of enactment of the Real Estate (Regulation and Development) Act and establishing of the real estate regulator.
Overall, improvements in most countries across the region have been small. The biggest improver in the latest survey is Taiwan, which has moved into the ‘Transparent’ category for the first time. More moderate improvements were achieved by Japan, South Korea, India and China, with China’s Alpha cities now on the cusp of the ‘Transparent’ category. At the other end of the spectrum, Myanmar retains the title as the least transparent market in Asia Pacific, although it was amongst the ten biggest improvers globally.
The major factor driving improvements in Asia Pacific has been the increased availability and quality of market data. For example, Sri Lanka makes a debut in the rankings for the first time and is on the cusp of entering the 3rd tier of markets from its current 4th tier. In some countries improvements have also been seen in regard to performance benchmarking, the enactment of new legislation, the introduction of higher ethical standards, and the wider adoption of ‘green building’ regulations and tools.
“These results are encouraging as they highlight the steady advance of the region’s real estate industry,” says Jeremy Kelly, director, Global Research Programmes at JLL and main author of the report, Taking Real Estate Transparency to the Next Level”.
The launch of GRETI 2016 comes at a time when international institutions, national governments and businesses are demanding greater integrity and clarity in investments and transactions.
It reflects a growing recognition of the crucial role that a transparent real estate sector plays, not only as a facilitator of new investment and business activity but also, significantly, in community well-being and inclusiveness, according to the report.