Real estate has been a good investment for lots of people in India from quite some time, one main reason for this is the sense of security it provides. But in the recent times, yet another reason has come to light and it’s nothing but the striking rise in the real estate prices over the last few years. However a few quarters in 2015 saw the abatement of rise which made the investors think that real estate is not a good investment option. But the experts say that the abatement is just for the residential real estate, and the commercial real estate is definitely a good bet for an investor ufabet.
India, with the underserved economy (with respect to real estate requirements) is followed by a significant gap in the demand and supply of units in both commercial and residential real estate. Having seen this, Indian government introduced the strong policy reforms to bring in more transparency to the investors and end users. It’s been said that 2016 is going to be a great year for the real estate market. Supporting this, office space absorption in the country stood at 35 million sq. ft. which was the second highest figure in absorption after 2011.
Vacancy Level in India
The vacancy level in India is still around 10 – 14%, but the cities like Bengaluru, Pune, Chennai and Hyderabad have the vacancy rate of just 5-10%; this prompts the need for fresh supply in order to meet the growing demand. The developers are also backing off from commercial projects as the rents are not reaching the points where they can get the Internal Rate of Return (IRR) of 18-20%. However if the rents start climbing, the developers are sure to start the constructions at least in good markets.
Policy Reforms to Improve Market Sentiments
The government reformed the policies and these reformed policies are expected to improve the real estate market sentiments in India. So the non-resident Indians (NRIs) and foreign nationals can directly invest on domestic AIF (Alternate Investment funds) in India. The regulatory bill of real estate which was long awaited has finally been passed and is said that it leads to significant transparency in the real estate dealings. Along with the tax pass-through status awarded to investors, the government has also offered some treaty benefits to the investors, which has been the main reason for them investing on real estate.
