The Investors Money Waits at the Real Estate Doorstep

The real estate sector in India is going through a great enthusiasm as the decreasing rate of the investments are now witnessing an upswing there are ray of hopes of a better tomorrow. There are also speculations of the real-estate sector getting rejuvenated. The foreign institutional investors have expanded their reach to the Indian equity market by making a net investment of approximately Rs.33, 394cores. The private equity investments have shown a massive growth this year.The market has evolved in a better situation with the increase in the investment activity; the investment activity has been slowing down in the past quarters and now there are hopes for the real estate sector to grow.

According to the investment experts apart from going in for structured deals the investors can now go on for a compact asset. These complete packages are now available in larger numbers.

As per the recent reports of a global real estate consultancy named Cushman and Wakefield (C&W) shows an increase of about 2.5 percent in the private equity within the last quarter of 2014. The report also showed almost a 30 percent increase in the quarter ending in March 2014, when compared to the last quarter of 2013.

The Out Pour of Investments   

The report of C&W shows that around eight private equity deals have happened in the recent past within the real estate sector. The demographic location of these have been; 4 out of those eight in Bangalore,2 in Delhi and one each in Pune and Mumbai.

The decreasing value of rupee and a weak economic scenario of 2013 resulted into the exit of some of the foreign investors form the real estate sector. With the stabilizing economic conditions several foreign investors are turning back towards the Indian real estate with an improved potential to invest.

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10 Major Indicators of Real Estate Trends In India

India’s real estate sector has undergone a complete face-lift in a decade aft passing through remarkable times. One of the global property consultants with its recent study based on the observation in over pat 2-3 quarters has revealed the 10 major factors that indicate the trend of Indian real estate.

According to the study the top 10 indicators are:

1. Supply

    Supply is one of the key indicators of the real estate trend in the country that shows the flexible signs of recurring cyclical ups and downs of the market depending on the number of new launches. Currently, this trend is seen in cities like Whitefield and Hosur Road in Bangalore, Greater Noida and NCR-Delhi, Mumbai, and Chennai. 

2. Demand

    Demand has declined in NCR-Delhi, while in other cities it is stable and new launches are attracting buyers and significantly NCR-Delhi has attributed about one-third of new launches and but the net absorption dipped to 36 per cent from 40 per cent by first quarter of 2014.

3. Available Rate

   In terms of vacant apartment units, the available rate has risen across all cities except Pune and Hyderabad, which are witnessing huge optimistic market.

4. Rentals/Leases 

    Across the major residential markets likeBangalore, Chennai,Mumbai, and Pune the rental value has seen slight increase. Before becoming stable, rental values in NCR-Delhi went through a correction for high-end properties, whereas Kolkata and Hyderabad witnessed huge inactive.

5. Capital Values

  The capital values have gradually ascended across cities; while in Tier-1 cities due to sluggish sales moderate price growth is observed. In some residential market increase in price was seen due to new launches. Generally, pan-India prices have increased by less than 2 per cent by quarter-on-quarter basis for the past three quarters. The Tier II cities of Chennai, Kolkata, and Pune witnessed huge growth due to lower prices.

6. Project launches

   Mostly, new projects were in the mid-segment that comprises of 2 and 3BHK, along with the launch of studio apartments and also luxury as well as serviced apartments was launched for chosen buyers. 

7. Developing Areas

   Few cities like Sohna and NH-24 (NCR-Delhi), Ulwe and Karanjade in Mumbai Developers explored newer corridors in cities such as Sohna and NH-24 in NCR-Delhi, Ulwe and Karanjade in Mumbai and Hennur Road in Bangalore emerged as the developing areas due to the reasonably priced projects.

8. Infrastructure

   Projected infrastructures developments like new highways and Metro connectivity in a locality made developers to come with new projects and this attracted many buyers.

9. Buyer/Investor confidence

    Due to high interest rates and increasing property prices, buyers/investors are sitting on fence waiting for good market condition.

10. Developer/Builder sentiment

     At present, the sentiment of real estate developers is depending on the new government. They are hoping for some optimistic alterations in the market by the new government taking some measures and implementing some positive policy changes from.

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The Real Estate: Signs of Improved Panorama

A strong and a positive outlook have been seen with the real estate investors and buyers after the political change in the country. There is a strong positive display in the improved sentiments of the realtors in the sector.

The survey conducted by Knight Frank and FICCI showed that stakeholders have tied high hopes to the newly formed government.

The report also suggested that the realtors are confident about the time to come and also expect the business environment to prosper within the span of six months. The stakeholders have tied their hopes on the forthcoming government and massive change in the political leadership.

This buoyancy is not limited to any region in particular in the country but the confidence is measured the same from     North to South and East to West. The report also directed rays of hopes for better and improved conditions of both developers and financial institution. There has been a huge expectation that the real estate sector will perform well in the coming six months.

As the people are keeping their on to the new government to take the charge a sense of confidence and much improved sentiments could be seen across all sectors in the real estate industry. Many real estate developers and financial institutions are confident about the better future of the real estate sectorsits funding scenario.

A confidence that the business environment will prosper is believed by various stakeholders. They are expecting the sector to show a massive graph in terms of its growth.

Reports of the survey also focused that, approximately 67 percent of the respondents are speculating major improvements in the Residential Projects catering to sales and project launches in a span of six months. With all these aspirations the price appreciation is likely to remain torpid.

The stake holders are expecting hike in the leasing volumes by the third quarter of the 2014.It is also known fact that the new office supply will be under a check for the next six months.

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Money Laundering Practices in Indian Real Estate Industry

The possibility of Money laundering in the real estate sector is estimated to be at a high level. Therefore there is an immediate need for a regulatory body to maintain an account for such activities.  The real estate for long has been the preferred choice for criminals when it comes to hiding the ill-gotten money. One of the oldest known ways to illegally transfer the proceeds between the parties to a deal is by manipulating the prices.

The findings have confirmed that Indian real estate sector has been used as a groove for fraud or illegitimate financial deals. Many unlawful activities such as tax fraud, money laundering are vulnerably happening within the Indian real estate market.

With the increasing ill practices within this sector the real estate developers, brokers and dealers require a regulatory mechanism to track such happenings. A system well planned one which is under some kind of in-house regulation. Other sectors like the banking and commerce have their own functional body to track the illegal money laundering. The telecom sector has also underwent the a strong vigilance with the 2g scams happening and now it’s the real estate sector which is in an immediate need for a regulatory rule enforcement to handle the money laundering activities.

As per the statistics the money laundering activities has been increased in a drastic level. This has been happening over the past few years. India has been one of the five popular countries to invest and the rising economic stress is giving higher opportunities to dig the money deep hidden in the real estate market.

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