Realty India Expo offers multiple options for Gulf NRI investors

India requires 110 million housing units by 2022 with an investment tag of $2 trillion, according to a recent survey.

The Realty India Expo started on Friday at Crowne Plaza on Sheikh Zayed Road in Dubai. The two-day event is showcasing a wide range of options for Gulf NRI realty investors, especially at a time when the Indian realty market is poised for a major turnaround in development.
Property developers from across India are providing multiple investment opportunities in the midst of economic development sweeping the country amidst RERA and GST implementation. Indian realty sector is slated to grow at 30 per cent over the next decade for a market size of around $180 billion by 2020 from $93.8 billion in 2014. And the affordable housing sector is set to grow at a much faster pace, more than 30 per cent. Key factors attributed for the upswing include emergence of nuclear families, rapid urbanisation and rising household income.
India requires 110 million housing units by 2022 with an investment tag of $2 trillion, according to a recent joint survey by NAREDCO and KPMG. India is ranked fourth in developing Asia for FDI inflows as per the World Investment Report 2016 by the United Nations Conference for Trade and Development. Indian real estate has attracted $32 billion in private equity so far. The global capital flow into Indian real estate in 2016 stood at $5.7 billion.
On the realty sector front, residential supply level has come down by 12 per cent from peak 2016 levels and RERA regulations have put pressure on new supply creation as developers are keen on completing existing projects in order to avoid litigations. Institutional researches indicate that seven-year down cycle will end in 2017 and the market is set for turnaround in growth in 2018. Moreover, Indian government's policy push by way of fiscal sops for affordable housing should further the sector's all-round revival.
Residential property prices are static and marginally inched high in select metros where demand exceeds supply level. With lending rates at 8.35 per cent and price remaining static, the time is just appropriate for fence sitters to plunge into housing investment. Moreover, with a fierce competition among HFCs and banks, certain banks have started waiving EMIs for specified period on condition that EMI payments were regular. With the fiscal sops from the government for affordable housing sector, there is huge scope for homebuyers to invest in housing.
For real estate investors, leased commercial properties are now available for investment. In fact, select developers are offering retail investors an opportunity to invest in commercial property with minimal income. Commercial property loans are available for investors looking to increase portfolio in real estate investment. This is apart from loans available for investors while investing in developed plots.
Retail investors are in for a bonanza as REITs will provide an investment opportunity worth up to $77 billion through REIT-eligible commercial - office and retail properties across India's top seven cities by 2020.
The budget has provided significant benefits for housing sector. The holding period for long-term capital gains tax has been reduced from three to two years. The base year for cost inflation index has been shifted from 1.4.1981 to 1.4.2001, which will significantly reduce the capital gains tax liability while encouraging the mobility of assets at the same time. The budget has also clarified that for joint development agreement while constructing projects, the liability to pay capital gains tax will arise in the year the project is completed.
With the proliferation of property management companies and the developers targeting NRI segment gearing up to provide property management services, NRIs are in an advantageous position while investing in real estate back home. Moreover, demand for rental housing is perking up in major cities across India.