Ringing the Realty Cash Register
Trends, opportunities and new frontiers

21 January 2016
ITC Maratha, Mumbai

‘Realty’ in the economy’s driving seat 

The efficiency, through which the Real Estate sector invests, develops, supports, and maintains the built environment and services its clients, is of crucial importance to policy makers. A performing real estate sector provides the basic platform for the economy to deliver to its full potential and remain competitive. In fact, there are no two opinions on the sizeable impact that property markets have on the soundness of financial institutions and on macroeconomic activity.

It’s all about having money

The Indian real estate market once a preferred and safehigh return investment option, has in the recent past seen an overall slowdown. While there is no shortage of capital flow globally, what’s dictating the flow of money is the level of professionalism and international standards which India needs to improve and sustain in order to attract and retain investment.

Also for Real Estate to perform to its full potential – the critical aspect is ‘access to low cost capital’. Liquidity, title ownership and high transaction costs continued to act as constraints to cross-border investor activity.

But considerable improvement has taken place over the years with respect to the legal framework. A major turning point has been 2014, when the real estate landscape started to change. Clearly there is positive momentum since then.

Several policy reforms & initiatives such as relaxing FDI norms and implementation of REITs should further enable unlocking investments in the sector. In fact, there is evidence of investments actually having picked up once again with PE funds almost tripling their investments in India during the first half of 2015.

With political stability having returned, the economy seems to be looking up as well. The elimination of minimum capital requirements on setting up businesses, single application forms for new firms, ease in acquiring construction permits etc., all support the Governments ‘Make in India’ campaign. Also, with GDP growth being pegged at 7.5%, there are expectations of a new investment cycle in the sector. Driven by the need to increase returns through expanded investment opportunities and a desire to diversify, investor’s interest in international property markets is once again on the rise and India as a market continues to hold promise.

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