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.

Realty Plus - - Editor-In-Chief Note -

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. 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.

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.

Gau­rev KAPUR

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