The Prospect of Real Estate Sector for Foreign Investors


Indian real estate has gigantic potential in virtually every segment particularly commercial, residential, retail, industrial, hospitality, healthcare etc. However, the key developments in this segment in India are chiefly the townships, housing units, shopping malls, workplaces, retail stores and viable multiplexes. The key growth has come because of snowballing purchasing power, favorable demographics, actuality of customer friendly banks and housing finance firms, expertise in this sector and favorable reforms instigated by the government to entice global investors. Real estate investment in India is chiefly a long-term investment providing low liquidness to an investor. Investors can delve into renting out their property to bring constancy in incomes. This can also decrease the burden of EMIs for a property bought on a loan.

There are several banks and financial organizations that offer loans at striking rate of interest to the constructors. NRI real estate business is also going up in India. Recession had trifling influence on this segment. Consequently, the segment is opening up progressively more investment chances for both domestic and also foreign investors. This segment is tremendously a lucrative venture, as the profits of investors have practically doubled or have derived 100 per cent profits in the residential section. The desirable time horizon for investment in this segment is four to seven years for improved returns. The industry is prevalent for providing the second principal employment after agriculture. One of the chief reasons for this development is the strategies taken by the Government of India regarding foreign funding advisor for Indian NGO.

The Government including reserve bank of India (RBI) and Foreign Exchange Management Act (FEMA) has relaxed the rules and guidelines for the NRIs to make investment in real estate. India has appeared as a peak favorable destination for foreign direct investment (FDI) in the globe with 100 per cent relaxation of FDI regulations in this segment. The Government of India has now permitted international and domestic firms to function real estate funds via private equity funding. RBI has also reduced its rate of interest in the home loan division. Folks can avail the massive tax benefits on investing in real estate:

  • Tax exemption is obtainable on re-investment of sale ensues of property in worthy possibilities.
  • Tax advantage is available on interest on housing loan raised in India.

These days, real estate investment in India is more prolific and revenue generating in contrast to other businesses. India is a benign investment destination for this segment with guaranteed returns of 10 to 12 per cent.

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