The Royal Institution of Chartered Surveyors has launched the RICS Valuation Standards (the ‘Red Book') – India edition with valuation standards of global application along with India-specific guidance.

According to a press release from RICS, through this novel initiative, the RICS ‘Red Book', considered the ‘Gold Standard' in valuation worldwide has been localised for the Indian market. A single set of globally consistent and locally relevant asset valuation standards are now available to RICS members and industry valuers.

The absence of a developed valuations profession, which remains ungoverned by any specific laws, authority or regulation, has hurt the Indian market.

The lack of transparency and established standards for valuation and accounting of land and property have all contributed to the challenges pertaining to valuation of real estate companies, market value of land banks and property assets where over/under reporting of value, inflated valuations, unprecedented price escalations, inaccurate compensation to land owners have been common occurrences.

The Red Book global standards align and comply with standards set by International Valuation Standards Council (IVSC). While the IVS provide broad principle-based standards, RICS Red Book provides a practice framework for implementing IVS, by way of localised standards and guidance across different countries for different applications including valuations for bank lending, taxation purposes and financial reporting, among others.

The purpose of Red Book standards is to provide an effective ethical and practice framework, so that users of valuation services can have confidence that a valuation provided by an RICS member (for whom these standards are mandatory) is objective and delivered in a manner that is consistent with internationally recognised standards.

Mr Sachin Sandhir, Managing Director & Country Head, RICS India, said “RICS India has focussed on contributing towards development of the real estate sector and valuation is one such important area. Along with qualified chartered and non-chartered professionals who operate to the highest levels of professional competence, we also focussed on building capacity and upskilling professionals in different areas of real estate including valuations.”

India's transition to International Financial Reporting System (IFRS) which is based on current value accounting is driving the need for institutionalising international valuation standards (IVS) which is what the RICS Red Book follows.

Mumbai realty prices on upswing

A study by 99acres.com, a real estate portal, has shown that property prices in the Mumbai region has escalated in the first quarter of 2011 as compared with that in the first quarter last year.

Mr Vineet Singh, Business Head, 99acres.com, said “The real estate market of Mumbai has been an attractive destination for buyers because it provides high return on investments. Almost 50 per cent of the Mumbai market comprises investors. And we find that despite the slowdown in transactions for the past 4-5 months prices continue to move up. However, the growth in prices will moderate and increase in a 20-30 per cent range for 2011.”

A look at the property prices of key localities in Navi Mumbai show that Panvel, Belapur and Kamothe has seen a high appreciation, with prices moving up by 52 per cent, 36 per cent and 35 per cent in Q1 2011 over Q1 2010.

Property prices in Panvel is around Rs 3,708/sq ft. and in Belapur and Kamothe around Rs 6,485 and Rs 3,994 respectively in Q1-11. Similarly Wadala in the Mumbai Harbour area saw prices appreciate by 28 per cent.

Key localities around the Mumbai Andheri Dahisar area saw an appreciation with areas such as Kandivali (East and West), Borivali (West and East), Andheri (East), Malad(West) witnessing a 17- 26 per cent rise in prices in Q1-11 over Q1-10. Prices of Mira Road is around Rs 4,422 a sq.ft. in Q1-11 which is 40 per cent above the Q-10 prices.

Prime localities of south and south west Mumbai such as Parel, Khar and Santa Cruz(West) saw appreciation by 40 per cent, 34 per cent and 32 per cent respectively in Q1-11 over the same time a year ago. Prabhadevi, Bandra(West) and Worli witnessed a 4-per-cent rise over the same time period.

99acres.com was launched by Info Edge, in September 2005, as a gateway to the property bazaar, and an information 'exchange' for buying, renting and selling of all types of residential and commercial properties anywhere in the country.

The Web site enables easy access to a huge property bank for netizens and allows for direct connect with brokers/builders in cities in urban and remote parts of India. With properties of almost 8,000 builders, 60,000 brokers and 100,000 individuals, the portal lists over 200,000 properties at any time. It has a registered database of 300,000 users.

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