India Real Estate – Investment Opportunities For All

In India, people are buying land and property not only for residence purposes but also from an investment’s perspective. This is the most attractive investment option made available in the country (others being gold, stock and insurance policies). The main reason for this huge boom and attraction in the property market is India’s strong economic performances. Consequently, lots of MNCs are setting up their offices in India which in turn is providing robustness to the real estate business in these cities. With the easing of the government norms, an increasing amount of foreign institutions are looking towards Indian real estate market in order to make some large investments and reap in some huge profits.

Changing Scenario of Foreign Investment in India

The government has now allowed foreign investments in constructions of projects related to both commercial and residential sectors. This tends to include residential societies, commercial offices, hotels, hospitals, resorts etc. There are certain conditions imposed on the FDI which might be coming through this route –

1. Minimum of 25 acres of land might be required when involved in a residential development.
2. Minimum of 50,000 square meters of land might be required when involved in a non-residential development.
3. When the project is a mix of both commercial and residential development, either of the above conditions should beforehand be satisfied.
4. All local land usage guidelines should be followed.
5. Within six months of starting of a joint venture or subsidiary, the foreign capital must be invested in India.
Such liberal norms have further heated up the real estate market. Property experts believe that the demand to go up further once the actual capital begins to come in.

Increased Interest of Local Investors

In the year of 2005, New Delhi, Mumbai and Bangalore were considered as the top 3 destinations for real estate investors. As per the annual Investor Sentiment Survey – Asia conducted by Jones Lang LaSalle, these three cities will continue to attract investors, both in residential and commercial sectors. This survey has only 3 responses which are used to measure the total returns which might be expected by an investor for his investment in real estate. 1 signifies positive, 2 neutral and 3 stands for negative expectations. The overall projection was neutral to positive outlook in the short term (i.e. 12 months), with Mumbai and Bangalore topping the list (1.13). Delhi followed next at 1.17. The survey also concluded that people might be becoming more cautious in the short term markets (the average sentiment index has gone up to 1.62 as compared to 2004’s figure of 1.33). Other reasonable factors are fear of hike in US federal rates and weakening of the US dollar. Some of the good news is that the average in the medium term market was rated at 1.54.

Proper Timing for the Investment

Although the interest in people is growing towards this sector, one still needs to be cautioned about the investments one might be about to make. Timing of investment might play a major role in deciding if the returns will be as per the expectation or below the expectation. It is never advisable however to invest in an over heated market. One might need to be patient enough and wait for the proper time in order to invest. One should also be well informed about the announcements that can provide a kick to the property price. For instance, in New Delhi, once it was finalized that Delhi Metro will pass through Dwarka (a locality within Delhi), the prices in the area almost doubled. In conclusion, one should always be alarmed about such triggers, which can have an effect on the value of an existing investment as well as future prospects.

Article Source: http://www.realestatepropertyarticles.com.

About the Author:
Ann Sommers is a contributing real estate editor at http://www.realestatepropertyarticles.com/. This article may be reproduced provided that its complete content, links and author byline are kept intact and unchanged. No additional links permitted. Hyperlinks and/or URLs must remain both human clickable and search engine spiderable.