New FDI Rules Serve as Hope to Realtors
The new FDI incorporated rules are setting high hopes for the Indian real estate. Even though the Indian real estate had a lack lustre festive season, realtors have high hopes.
With the festive season having recently ended, the real estate developers suffered a massive blow to their campaigns and in spite of having sufficiently advertised and promoted their projects, sales failed to pick up during this season. Developers who were hopeful of offloading the various parts of their inventory ended up being stuck and efforts being futile.
Hopes ahead: The recently implemented rules of the FDI norms allowing 100% FDI in projects will be greatly beneficial and has proved to be new hope for the realtors. To bring in foreign investors to Indian projects, the minimum required built-up area is now reduced to 20,000 square metres, from the previous 50,000 square metres.
Such measures is believed to bring in ample relief to the real estate sector that has been plagued with unsold stock, poor sales and severe crisis of resources due to poor economic conditions. Other problems pertaining to debt, buyer activism and insufficient regulation shall also be resolved.
The realtors and this sector are reported to have been caught in a vicious circle of debt. Several regulation and over enthusiastic serial developers resulted in a glut in the market which is considered to be a major contributing factor for the resulting debt. The economic slowdown is also a partial reason coupled with other financial issues related to shortage of resources, high interest rates.
Banks refused to finance projects due to the perceived risk impending losses which could be predicted from the prevalent economic scenario. Private sources which turned investors financing the projects turned rates to be exorbitant making it furthermore difficult and increasing the cause of debt.
It is in these sectors that the liberalisation norms can truly benefit the realtors. So coming are the golden days of Indian real estate, as hoping by all leading Indian players of the sector.
Source: Business Standard
The new FDI incorporated rules are setting high hopes for the Indian real estate. Even though the Indian real estate had a lack lustre festive season, realtors have high hopes.
Economic slowdown, FDI in projects, FDI incorporated rules, FDI rules, Indian real estate, leading Indian players, liberalisation norms
