2018 is expected to see a spurt in global investments in real estate in India. This includes Bengaluru too. The spate of regulatory reforms has instilled a high level of confidence in not only Indian investors but also the global ones. Apart from Singapore, Canada and the US, other countries such as the Netherlands, Hong Kong, Qatar, China and Japan will also be spending big bucks here. With the commercial property market set to soar, and more jobs created, the residential property market will also take off big time, as both go hand in hand. The real estate sector in India could receive Private Equity (PE) investments of US$4 billion during this fiscal year, industry reports have stated.
Global sovereign wealth funds are also increasing their exposure to the market. This is proof enough that the sector is heading towards a positive direction. This is because these funds are known to be risk-averse. The current real estate environment in Bengaluru and the rest of India presents an opportunity to homebuyers to invest in property. Revival is on the cards. In 2017, home loan interest rates were at an all time low. The banking system’s excess liquidity led the RBI to rejig key lending rates.
As a result, the home loan interest rates came down to 8.3-8.4 percent from 9.5 percent in 2016. This means considerable savings on EMI costs. People can avail low-cost home finance. The home loan interest rates may come further down. Property buyers are in a better position to negotiate with builders because of excess supply. There are huge inventories across the country because of a combination of excess supply, low consumption, and high prices. The consumption side has been majorly impacted by demonetisation and RERA and GST implementation.
Experts believe that the next few quarters will see homebuyers receiving major discounts and excellent deals from developers. But not for long! Developers are now primarily focussing on clearing up inventories. New home launches have gone down by more than 75 percent across top eight cities in India, industry reports state. This means the supply side will gradually balance out demand. Once it does, prices will shoot up. RERA is now fully implemented, and top Bengaluru developers have gone the extra mile to make sure that all directives have been followed.
RERA will protect buyers’ interest. RERA and GST have given the real estate sector a certain direction. From now on, all projects must be in compliance with all provisions of RERA. This will ensure monetary security and timely completion and delivery of projects. Only the most committed developers will be able to survive. In short, RERA will benefit both buyers as well as developers. One of the primary questions to answer when investing in real estate is – How do I time my entry into this investment channel? Most homebuyers make the mistake of investing when the prices are peaking. This results in lesser returns on investment.