Realty News

Indian realty: The new investment haven

A spate of structured reforms including demonetisation and Goods and Services Tax (GST), implementation of RERA, a push to affordable housing, the Benami Transactions Act and the REITs have led to critical growth and development within the infrastructural, residential and commercial areas. This, in turn, has renewed the interest of the investors in the sector giving it a new lease of life. The country has also moved up 30 ranks to the 100th position on the World Bank’s scale of countries by Ease of Doing Business for 2018. All this has made Indian real estate an investment-friendly destination.

The extent to which the real estate sector has grown can be gauged from certain key numbers. In 2018, the sector clocked in nearly $5 billion in institutional investment and 60 per cent of this capital flow was led by Foreign Institutional Investors.

Economic forecasts also paint a positive story. The RBI survey of professional forecasters (August 2018) indicated that GDP is likely to grow at 7.4% in 2018-19, up from 6.7 per cent in 2017-18, and is expected to accelerate further by 20 basis points in 2019-20 on the back of support from private consumption and investment.

The policy reforms have also brought in a significant improvement in the transparency and credibility of the sector in India. Real Estate investment in India is now safe within a legal framework and jurisdiction focused on customer rights. Thus, the country has seen a significant improvement in demand from end-use customers and NRI investors alike. The stringent requirements of RERA have resulted in a reduction of launches and thereby reduced inventory overhang and excess supply in the market.

If we look at the preferred markets, cities like Mumbai, Delhi NCR and Bengaluru have accounted for over two-third of investments from 2009-2018. With 42 per cent share of investments valued at $8.6 Bn, Mumbai is a clear front-runner It is followed by Delhi NCR and Bengaluru with $4.4 Bn and $2.6 Bn respectively. It is worth noting that among the different types of institutional investors, private equity investors have contributed 80% or more of the overall institutional investment in the last decade.

Real estate markets are poised to benefit not only from the government’s policy push towards reforms, speedy completion of several infrastructure projects, but also an over-arching ‘can do’ spirit riding across private as well as public sector enterprises today.

In terms of market traction, commercial real estate retains its status as the most buoyant sector drawing 50 per cent of all investments. Demand for Grade A office space saw new highs and vacancy levels declined in prime locales. Apparently, indirect taxation framework also helped to streamline the sector.

Besides commercial, the retail segment is another asset class that witnessed a sharp rise in investments. From $134 Mn during 2009-13, investments in retail surged 11-fold to reach $1.6 Bn between 2014 and 2018.

Things to check before taking possession of your house

Getting the keys of your new home is an exciting and celebratory moment for any home buyer. However, in this excitement, we often overlook a few things which might become problematic in the future. This could be poor construction or lack of promised amenities. So make sure, you refer to this checklist before taking possession of your new abode.

  1. Documents: First thing first. Make sure you get hold of original and photocopies of all the essential documents from the builder/owner. These may include Encumbrance certificate, NOC, Khata, General Power of Attorney, Registered deed of conveyance, car parking etc. 
  2. Amenities: This is a potential area of disappointment in many projects. Builders promise a spate of facilities such as swimming pool, clubhouse, play area, gym etc. at the time of booking. However, it may happen that at the time of possession either these amenities are under construction or builder is unwilling to provide all of them. So before taking ownership, ensure that these amenities are in place as per the agreement.
  3. Wall paint and cracks: Do not forget to check the walls for any cracks or paint wrinkling. Leakages and damp patches, if any, need to be rectified.
  4. Fittings: From electrical to bathroom fittings to door and window handles, ensure everything is in good shape and quality as promised during the time of booking.
  5. Lifts and common areas: If your unit is higher up, check for elevators and stairway. They should both be in working condition. Besides this, see if the common areas are well-lit and have the promised flooring.
  6. Drainage: This is another essential thing you need to check before taking possession of your new house. Clogged outlets could be a big headache and a mood-spoiler when one moves into their new home. Hence, it is advisable to check all drainage outlets in balconies, bathrooms, kitchen, utility, etc.
  7. Safety features: Firstly, ensure that there is no faulty installation, and all the switches, sockets, plugs are working correctly. Then check for fire safety, CCTV, and other security essentials including guards.
  8. Get hold of all the keys: Sometimes when the property is bought from the builder, the maintenance agency usually has one set of keys. Make sure you obtain all of them at the time of possession.

Being sure about everything saves a lot of trouble when you shift to a new house. So, keep this checklist handy and check everything before starting anew in your dream home.