10 Reasons why Moolah will return to Indian Real Estate in 2016?

The future picture of Indian economy is bright and Real Estate sector is emerging

as a lucrative investment option.

The World Bank predicts India to be the fastest growing economy in coming years with close to 8% GDP growth rate.

After last few years of slowdown, Real Estate Sector is set on the path of growth. Though the foreign investment started to flow with the formation of a stable government in May 2014, economic reforms and liberal FDI policies have further made the investment process easy

Riding on the hope of “Acche Din”, India saw a huge $2.2 billion (70% raise) foreign investment as per JLL reports.

Apart from private sector investments, several government projects like development of Smart Cities, affordable homes for EWS (economically weaker section of society) and housing for all by 2022 offer good potential for investors.

The time is right for investors to carry out some intelligent investments and below is ten reasons to believe and participate in the growth of the Real Estate in India in 2016.

1. Special Treatment for NRIs on Investment and non-consideration of property leasing as real estate business will boost the foreign investment in Real Estate Sector.

2. The minimum requirements of 20,000 square meter development and capital of $5 Million have been removed. This step welcomes small investors and will promote construction and development in Tier II and Tier III cities.

The policy of bringing foreign investment within 6 months of the starting of a project has been done away with, leading to more flexibility and ease of business in the country.

4. Lower interest rates, affordable housing schemes, and easy installments will allure middle-class families to buy property, so we will see a rise in the demand of residential property in class B and C cities.

5. Foreign investor can now exit from a project in 3 years or earlier if the project gets completed. The easy exit policy gives flexibility in ease of doing business, saves time and would invite more FDI.

6. The growing IT and Service industry will need more workforce and office space increasing the demand for residential and commercial property.

7. The soaring E-commerce industry will continue to grow as the number of online shoppers is increasing rapidly, there will be more demand of warehouses in future.

8. Manufacturers with foreign investments are now allowed to directly sell their products using online or offline platforms without government approval. For this, they will need infrastructure, warehouse, and office space, leading to increased real estate requirement.

9. Flexibility to Single brand retail trading in E-commerce will again contribute to the success of Real Estate industry.

10. No government approval is needed for eligible investment in LLP (Limited Liability Partnership) and foreign investment through share Swap. This will enhance the ease of doing business, thus attracting more foreign investors.

Keeping in mind the World Bank report and recent economic reforms, Real estate Sector in India holds a huge potential as a long term investment portfolio for individual investors. Besides, metro cities the Tier II and II cities are going to witness exponential growth rate in real estate in 2016.