Investment Trends in the Realty Sector

The real estate industry has witnessed buoyancy in 2014. But after a slowdown of 2 years, the realty sector this year has not quite taken off as anticipated. The Diwali season was a letdown and now end users as well as a lot of investors are dormant. They are observing the changes in the realty sector, waiting for positive changes to provide them with opportunities to initiate transactions.

But the scenario is changing and the government has also offered assistance to alleviate the distress of the property sector. The FDI norms have recently been modified to boost foreign capital investment. Realty companies have appreciated the move and many foreign companies have exhibited considerable interest in the realty markets of India.

As a result, it is anticipated that that the realty markets would see a considerable improvement in times to come. Many real estate firms are ready to invest in the Indian realty market. Some of them have already entered the market in collaboration with Indian counterparts.

The Incoming FDI

The realty based companies established in US, Europe and South East Asia are all gearing up to invest in India. These organizations have decided to infuse funds in India not only in residential development but also in other realty based businesses like resorts and commercial centres. It is anticipated that with the improving economy, the demand for all realty based services would increase.

Buyers are relatively comfortable in investing in residential accommodations; and they would mostly seek apartments and homes in housing societies. Territories like Gurgaon are witnessing high demand in certain pockets and low demand in others. Many properties in Gurgaon for sale have not seen buyers in a long time. Many areas have buyers swarming in! The situation is a bit more complicated in the case of commercial centres; many of which have not yet seen lessees.

That being said, it is not easy to buy apartments in Gurgaon. The costs do not depreciated in proportion with demand. However all this is set to change with the renewed inflow of FDI in the coming times.

There are certain experts who believe that the prices of accommodations would increase considerably with foreign investment. Even though this investment would help in settling debts, the easy inflow of capital would affect the demand and the prices would soar. But the opposing school of thought emphasizes that the property rates would increase on their own nevertheless and the foreign investment would not impact them.

Emergence of New Markets

Even though there has been no considerable change in demand in prime territories of India, surveys suggest emergence of new markets. The prime markets, during the downturn experienced a slowdown and buyers were dissuaded from purchases. During the same time, relatively economical destinations emerged and lured in a fraction of buyers seeking accommodations in the big cities.

According to a survey conducted by IIM Bangalore, it has been confirmed that the investors and buyers from within India are waiting and watching the markets to exhibit positive signs. In the meantime, these investors are also investing in newer territories. While Pune this year exhibited a positive demand among all the eleven major metropolitan cities, the surprise emerged in the form of Ahmedabad.

In Conclusion has constantly been monitoring property markets and it is set to enable services for any new territory that might emerge with a critical mass.

Author: Richard Casteel

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Richard is the chief author of this blog. He worked as a financial advisor in money market form last 10 yrs. His financial sense in Share trading and any other trading is just outstanding. He just shares his knowledge and experience through this blog. You can contact him directly though

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