With the fluctuations in the economy of India, investors are playing it safe and choosing to invest carefully. According to the finance minister of India, Arun Jaitley, due to the continuing reforms, India’s financial growth will skyrocket higher than last year 7.3 percent despite global challenges. Since years now, India has always been in the spotlight for its economic growth and its impact on the real estate segment. Researchers claim that among the different metropolitan cities and residential areas of India, the apartments and villas in Devanahalli, Bangalore, have witnessed significant demand by potential buyers and real estate investors.
- Changes in Indian economic scenario
As the nation has the potential to be the bright spot in the gloomy world economic scenario, foreign investors are lured with the relaxed and hassle-free conditions of doing business in India. The private sector investments have been slow, and a high cost of capital was also affecting several other factors. Local companies, which were working with some constraints in the wake of global demand slowdown and a plethora of capabilities, were capable of overcoming those challenges. Today the financial situation in the country is no longer acute as it used to be earlier. The fiscal deficit is dropping down while the inflation is under control. A keen understanding of competitive federalism is driving the Indian growth story as the states are all aggressively seeking investment. The ease of doing business is still said to be work in progress. Significant advancement has been witnessed, and a lot of improvements need to be done on a continuous basis. The cost of capital is high and its impact on infrastructure, real estate sector, and manufacturing, which is an essential engine of growth in India, is currently felt.
- Attracting foreign investors to invest in India
On seeing India’s growth story, international investors with a collective asset under management of $10 trillion have been advised to invest in infrastructure, manufacturing, and other sectors that have funding needs. It is considered that international investment is going to be an exceptional source of resource for India as the government is working on a slew of reforms. It includes a new law to ensure disputes are settled through arbitration within six months.
- How real estate in India is affected by the dynamic nature of India economy
In India, housing plays a critical factor from affordable accommodations to infrastructure and generation of employment. The residential segment comprising of building, townships, colleges, hospitals, and other projects make the maximum contribution in real estate industry and commands a large part of its market share. The overall health of the economy plays a key factor that directly affects the value of real estate. The GDP, manufacturing activity, prices of goods, employment data and few other indicators measure the health of the economy. The size and scale of the property market make it an attractive and lucrative avenue for investors. Due to the low capital requirements, low transaction costs, and high liquidity available in the market, the average investor prefers to invest indirectly in real estate. It has been observed that the south Indian cities have become a hotspot for real estate investment. Be it for residential purposes or as second home, cities such as Hyderabad, Chennai, and Bangalore are often chosen by potential investors. Buying apartments and villas in Devanahalli or Bannerghatta is more than just luxury.
With foreign investors organizing investment summits in their states and finding a resolution of long-pending tax disputes, the nation is well on its way to overcoming economic hiccups and finding financial stability.
This is a guest post by Surendra Hiranandani, Founder and Managing Director, House of Hiranandani