Resicom – Holiday Investment – 04-21 – LB

Time to buy Indian property

The recent Indian Property Exhibition in Dubai saw developers, investors, experts and agents overwhelmingly positive about the future for the Indian real estate market. The advice overall was to invest now before prices begin to rise.

Positive measures

The positive measures taken by the Indian government in terms of land reform and the opening up of the Indian real estate market to foreign investment were cited by experts and developers as sure to lead to an increase in activity. The government has invested the equivalent of billions of dollars in infrastructure projects that will aid business; however, the weak rupee means that this is still an excellent time for overseas investors to look at buying property in India.

‘Most of the builders have not launched the properties at higher price and the rupee is continuing to be weak,’ said Sunil Jaiswal, president of the Indian Property Show organiser Sumansa Exhibitions. ‘It can’t be a better time than this for the NRIs [non-resident Indians] to pick up their dream home or investment properties back in India.’

Controlling inflation

The devaluation of the rupee does not appear to be linked to any economic slump; instead, it is the result of the Reserve Bank of India’s primary objective over the past two years of controlling inflation; government policy is in accord with this objective.

‘The recent devaluation in the rupee has more to do with fears of monetary tightening by the US Federal Reserve,’ said Ashwin Balasubramanian, director of Buildmann Group in Bangalore. ‘Short-term devaluation of the Indian rupee, if it happens, will be a great opportunity for NRI investors to put money into Indian real estate.’

Mr Balasubramanian advised investors to look at residential projects with strong capital appreciation potential rather than immediate rental value, which is often low in residential areas.

Market growth

International real estate investment company JLL expects housing sales in seven major Indian cities to rise to 192,000 units in 2015, after a drop of 175,000 units in 2014. The overall real estate sector, including housing, commercial, retail and hospitality, is expected to grow at 30% over the coming decade, according to the company’s latest report. The market is expected to be worth $180bn (£113bn) by 2020.

Current government initiatives include Housing for All by 2022, which aims to provide homes for India’s 23 million homeless people, and plans for 100 smart cities. Both have been applauded, but criticised as overly ambitious.

‘Real estate in India needs to be given an industry status immediately and the central government should also take necessary steps to regulate the operations of the industry at the state level,” said DRA Estates’ managing director for Chennai operations, Ranjeeth Rathod. ‘While we appreciate the government initiative of bringing in a regulatory bill for builders, it should also think of bringing in a single-window system for quick project approvals and sanctions.’

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