Indian real estate market is certain to revive soon
NEW DELHI: The real estate market in India has matured after the slowdown and investors now have a more realistic view about returns these days, says Robert Marten, managing director, Global Real Estate Institute (GRI), a global club of senior real estate investors, developers and lenders.
"There has been a spike in foreign investment in India after the new government. We will not see an overnight impact of the reforms, but the Indian real estate market is certain to revive soon," he says.
The real estate sector has been reeling under the impact of sluggish sales due to high prices and costly credit and a severe liquidity crunch due to the cautious stance of lenders for the past couple of years.
Real estate investors too have been a cautious lot after burning their fingers in the slowdown.
Marten feels that while the market is recovering, there are a few bottlenecks stopping the real investment flow. A major concern is finding a credible partner to enter the Indian real estate market. "Due to the fragmented nature of the Indian market, with each city has a separate market leader and finding a credible partner to put money in is the major question for investors," he says adding, "Complex policy and regulations in the country is the other major concern."
The government has recently announced the 'Housing for all by 2022' scheme to address housing shortage in the country. Marten says this affordable housing opportunity can play as a major trigger in reviving the real estate market, adding, "Provided the government makes this a realistic business proposition and attractive for developers."
The Smart City scheme, where there is a plan to build 100 smart cities, is another prime opportunity for the real estate market, for which the government has already allocated Rs 48,000 crore. Marten feels smart cities are not a real investment opportunity immediately, but will surely turn into a big business proposition in the longer term.
The real game changer will be the launch of real estate investment trusts (REITs), "which is sure to provide easier and safer entry route foreign players into the Indian market," he said.
Founded in 1998, GRI is a global club of senior real estate investors, developers and lenders, which meets annually in different regions of the world to discuss potential investment opportunities