The Investing Trends
Golden Bricks, a Gurugram based real-estate consultancy service & research firm provides solutions for investors and home buyers. Gaurev Kapur, Managing Director, Golden Bricks gives an overview of the investment scenario in the sector.
Investing in a good property is the need and aspiration of every person. The biggest gap in the real estate market is the availability of consultants that can offer correct guidance and right professional advice. Also, there is a lot of apprehension among the investors towards the actual delivery of the property. Therefore a thorough research and validations by the property consultants about the property or projects before sharing with the investors or homebuyers becomes critical.
Post demonetization, many are moving towards creating an alternate source of income and therefore investing money in income generating assets like rental property, commercial and retail than residential. In addition, payment plans with only like 10% booking amount and EMI of balance 90% amount starting 12 months after the delivery or handover are becoming the popular method of attracting home buyers to make quick decisions.
This year will see increased sales in every product portfolio due to factors like cheaper home loans; RERA, REITs, infrastructure boost etc., but commercial segment will see maximum transactions. Though commercial properties are considered a long term investment but it includes a lot of options for income generating assets like retail, food courts, office spaces and service apartments.
Major financial trends include inclination towards affordable premium segment homes and income generating properties with good appreciation potential. Apart from Gurugram, that has the investment potential for investors till 2030; other cities which are gaining prominence among investors are Sohna, Bhiwadi and Neemrana in North India.
The benefit of FDI in real estate is both in value and in quality of projects. This would lead to increased investments in realty sector, bringing with it not only foreign capital but possibly new technologies as well. Publicly traded REITs will offer investors the benefits of commercial real estate investment along with the advantages of investing in a publicly traded stock. REITs are required to distribute at least 90 percent of their taxable income to shareholders annually in the form of dividends. This will bring in more money, transparency and NRI investors in the Indian real-estate.
While there are costs associated with RERA compliances, they are not widely known yet. Developers will also have to price in the cost of capital which they are supposed to block in escrow account for each project. Interest on land and other costs incurred by developer prior to project launch will have to be borne for longer periods by developers.
Indeed, there is a need of organized real-estate in India for both investors and home buyers. RERA addresses the trust-deficit as the aim is to improve transaction transparency and build customer confidence. The brokers will also reap the benefits as they will sell genuine RERA approved progress to their investors and the investors will make the right decision without the fear of getting misguided.