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Realty India Expo at Crowne Plaza on 26, 27 January
January 20, 2018, 3:01 pm

Times Realty India’s Expo scheduled for 26 and 27 January at Crowne Plaza in Kuwait will showcase a wide range of options for Indian realty investors, especially at a time when the Indian realty market is poised for a major turnaround in development.

Property developers from across India will provide multiple investment opportunities in the midst of economic development sweeping the country amidst RERA and GST implementation.  Indian realty sector is slated to grow at 30 percent over the next decade for a market size of around $180 billion by 2020 from $93.8 billion in 2014.  Key factors attributed for the upswing include emergence of nuclear families, rapid urbanization and rising household income. 
India requires 110 million housing units by 2022 with an investment tag of $2 trillion, according to a recent joint survey by NAREDCO and KPMG. India is ranked fourth in developing Asia for FDI inflows as per the World Investment Report by the United Nations Conference for Trade and Development. Indian real estate has attracted $32 billion in private equity so far. The global capital flow into Indian real estate in 2016 stood at $5.7 billion.

On the realty sector front, residential supply level home launches dipped by 78 percent last year and RERA regulations have put pressure on new supply creation as developers are keen on completing existing projects.   Institutional researches indicate that 7-year down cycle will end in 2017 and the market is set for turnaround in growth in 2018.  Moreover, Indian government’s policy push by way of a slew of incentives for affordable housing should further the sector’s all-round revival.

Residential property prices are static and marginally inched high in select metros where demand exceeds supply level.  The weighted average prices fell by an average of 3 percent across cities with Pune witnessing the highest decline of 7 percent YoY followed by Mumbai at 5 percent YoY.  Markets high on built units such as Hyderabad and Ahmedabad saw prices move up by 3 percent and 2 percent respectively. 

With lending rates at 8.35 percent and price remaining static, the time is just appropriate for fence sitters to plunge into housing investment, according to property consultants monitoring the price movements in the market. Moreover, with a fierce competition among HFCs and banks, certain banks have started waiving EMIs for specified period on condition that EMI payments are regular.  With the fiscal sops from the government for affordable housing sector, there is huge scope for homebuyers to invest in housing.

For real estate investors, leased commercial properties are now available for investment with a yield of 7-8 percent per annum at select cities.  In fact select developers are offering retail investors an opportunity to invest in commercial property with minimal income. Commercial property loans are available for investors looking to increase portfolio in real estate investment.  This is apart from loans available for investors while investing in developed plots. 

Retail investors are in for bonanza as REITs will provide an investment opportunity worth up to $77 billion through REIT-eligible commercial – office and retail properties across India’s top seven cities by 2020. 

The budget has provided significant benefits for housing sector.  The holding period for long-term capital gains tax has been reduced from three to two years.  The base year for cost inflation index has been shifted from 1.4.1981 to 1.4.2001, which will significantly reduce the capital gains tax liability while encouraging the mobility of assets at the same time.  The budget has also clarified that for joint development agreement while constructing projects, the liability to pay capital gains tax will arise in the year the project is completed.  

Advantage NRIs:  With the proliferation of property management companies and the developers targeting NRI segment gearing up to provide property management services, NRIs are in an advantageous position while investing in real estate back home.  Moreover, demand for rental housing is perking up in major cities across India. 


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