Indian realty attracts $1.99 billion investments 1H2017: Report
The Indian real estate sector has attracted total investment of $1.99 billion during the first half of 2017 and the residential sector accounted for 54% or $1.07 billion of this, according to a report published by Anarock Property Consultants.
The report stated that the residential property remained the most preferred asset class in Indian real estate during H1 2017. While overall investments in Indian realty touched $1990 million in this period, the residential sector accounted 54% ($1075 million) of total investments. In the same period, investments into commercial realty accounted for 40% ($796 million) and retail received 6% ($119 million) of total real estate investments.
“With the implementation of and implementation of Real Estate (Regulation and Development) Act, 2016 and Goods & Services Tax, the Indian real estate is witnessing greater transparency, which institutional investors have for long been waiting for. While end-user sentiment is beginning to revive now as clarity about the new regulatory changes emerges, the pent-up demand for homes is India is beyond question,” said Anuj Puri, Chairman – Anarock Property Consultants.
All indicators are pointing towards a decisive return of buyer interest over the next 18-24 months. Institutional investors, who are almost by definition in it for the long haul, are squarely focused on the positive signals for the future now emanating from the Indian residential property market, the report said.
India still has a massive shortfall of housing, and the Government is displaying serious intent on fulfilling its promise to deliver Housing for All by 2022. It has deployed several important policy-level initiatives to make housing more affordable for first-time buyers – and affordable housing a more attractive proposition for developers. RERA is affecting a major clean-up of the industry, leaving only strong and credible players in its wake, while GST has ensured a uniform and transparent taxation regime.
A large-scale revival of the residential sector, induced by rapid-fire regulatory reforms backing a massive pent-up housing demand of around 19 million homes, is now more than possible in the next 18-24 months. Unsurprisingly, institutional investors have picked this as the right time to deploy their capital into the Indian housing sector, Anarock said in a report.
While affordable and mid-income housing are attracting the lion’s share of investments, institutional investors are also making calculated plays into select integrated townships, which they have correctly identified as the next stage of housing evolution in a country where infrastructure development is not keeping up with housing development. Simultaneously, buyer sentiment has begun reviving on the back of rationalized property prices, reduced home loan interest rates and the fact that RERA now offers a viable level of protection to consumers.
Already, market indicators now point towards increased sales during the coming festive season because of improved buyer confidence post RERA. The RBI’s recent reduction in bank rates will also encourage buyers to expedite their buying decision to take the advantage of lower home loan rates. During this festive season, tier 1 developers are likely to become most active with launching new projects which had been kept on hold to meet the RERA norms. On the investments side, all eyes are now on the opportunities that present themselves in a market which is poised for a full-fledged revival in the foreseeable future, Puri added.