Property Insight – India

 

Mark Twain is said to have remarked, “Buy land, they’re not making it anymore.” He simply put words to the thoughts of real estate investors.

Soon, as the festival season begins, many developers will promise freebies and discounts that will seem too attractive to be missed

This year’s Union Budget, too, has taken several steps to revive the industry, there is a lot of action on the ground as new areas develop and provide ample scope for people to gain from possible price appreciation.

Buyers should utilise this time to bargain hard and make the purchase over the next 6-12 months. This will work to their advantage as developers are sitting on huge unsold stock and willing to offer discounts of 4-8%. As sentiment improves and transactions begin to pick pace, we will see developers withdraw these discounts and schemes. So, between now and the middle of next year may be the best time to buy property.

“Real estate investing doesn’t have to be difficult or mind boggling. When I teach people how to invest in real estate, my philosophy is to maximize return while minimizing the risks.  When done correctly, real estate investing is one of the safest and best long-term wealth-building tools in the world” says Namrata Pandey Srivastava , CEO and Director – Evente Clinic, Singapore.

The gloom over the real estate sector seems to be lifting. Both companies and lenders are upbeat. Reflecting this, the Sentiment Index-brought out by real estate consultancy Knight Frank and the Federation of Indian Chambers of Commerce and Industry-touched an all-time high in April-June. It was at 69 during the quarter, up 19 points from the launch level of 50 in the last quarter of 2013. A score of 50 represents neutral view while a reading above 50 signals bright outlook. A figure below 50 shows negative sentiment.

The latest Budget has also lifted spirits. One, it has paved the way for flow of funds to the sector by allowing foreign domestic investment, or FDI, in projects spread over 20,000 sq metres instead of 50,000 sq metres. Two, the minimum capitalisation required for FDI has been reduced from $10 billion to $5 billion. The Budget has also allocated Rs 4,000 crore for providing cheaper loans for low-cost housing to support the ‘housing for all by 2022’ scheme. Besides, Rs 7,060 crore has been allocated for building 100 ‘smart’ cities

Office spaces are better for those who want to invest in real estate for rental income. Rental yields for commercial properties are much higher than that for residential properties. However, the investment required is normally quite high.

The nod to Real Estate Investment Trusts, or REITs, is also positive for the segment. These trusts will invest primarily in office spaces. This move will give a boost to the commercial segment as a lot of money will chase high-quality properties, which will result in a further rise in rental yields.

“Don’t wait to buy real estate. Buy real estate and wait.” Will Rogers. These words by Will Rogers can’t be better suited for the Indian Real Estate market

The Indian Real estate is still one of the most robust investment options, especially in the long term. Here’s why:

  1. It’s safe (as houses) There’s a reason why ‘safe as houses’ is a well-known phrase: it’s true.
  2. It’s easy to get started You don’t need specialist knowledge to start investing in property: in fact, many Indian property investors didn’t start off intending to make their fortune through property. Instead, they just bought a house to live in. It’s only after seeing the value of their home increase – and realizing how much wealth you can generate – that many investors take the leap and start proactively investing.
  3. It’s easier to research than stocks and shares Playing the stock market requires a lot of education. You have to understand how the system works, understand the complex world of trading (not least the different kinds of financial instruments used), as well as research brokers and fund managers. Once you’ve done this, you’ve then got to get to grips with the companies on the market – which involves trawling the financial press, annual reports, other company releases and so on. Investing in property, meanwhile, is much simpler: at its most basic, you can simply jump online and start looking at properties.
  4. Price is flexible If you buy a share, you buy it at the market price at that time: there’s no scope to negotiate. In the property market, it’s exactly the reverse: buying and selling is all about negotiation.
  5. India’s economy is solid There may be some short-term wobbles, but India’s economic future is well and truly solid. The country’s population is projected to reach at least 1.7billion people by 2050 – and these people will all need housing, and a lot of them in the big metropolitan cities.

As Andrew Carnegie rightly puts it, ‘90% of the millionaires become so by owing real estate.’

So go ahead and make a smart choice.

evente

Evente Clinic Pte. Ltd.

1 North Bridge Road

High Street Centre #11-10

Singapore 179094

Office: +65 6333 9671

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