Regulatory Bodies Impacting the Real Estate Market of India

In India, the demand and supply of realty sector depends upon the economic conditions. In this scenario, the role of regulatory norms becomes more important than ever before. In order to make investments appealing for the Indian masses, the government has contributed its bit for the country. By easing out rules and regulations for building commercial projects, townships, built-up infrastructure and other such property segments, government has made the entire process hassle-free. Knowing that the real estate industry is one of the biggest segments to offer employments to people, it is rather essential to bring a change with the course of time.

Following are a few examples of how the process of buying property in India is evolving rapidly to tackle the regulatory issues -

Foreign Direct Investment (FDI)

Earlier last year, the Union Cabinet has passed its recommendation to ease out FDI norms of the country.  From a decrease to the minimum built-up area to a change in minimum capitalization, Indian government is leaving no stone unturned to ensure better availability of resources for developers and buyers. Thus, through such measures taken by the authority of India, real estate is definitely showing some great signs of revival.

Regulation and Development Bills

Apart from relaxing the FDI, government is also making sure that there are enough laws to mandate some privileges for buyers. The Real Estate Regulation and Development Bill was passed in the Rajya Sabha in 2013 and has been in action since May 2016. After the much-hyped regulatory bill was passed earlier this year, buyers have been able to invest their money with improved transparency in transactions and timely execution of a property. Therefore, after the launch of this Real Estate Regulatory Authority, almost all of the real estate processes are now being governed under one roof.

Apart from the aforementioned real estate regulations in India, advancement in the Real Estate Investment Trusts (REITs) has also become somewhat vital for the entire development process. These trusts functioning on the model of attracting small term investments are also expected to drive regular foreign investments. The role of REITs remains crucial as they are the ones investing in the completed real estate projects that are capable of generating revenues. By creating a visible process of raising finance in the realty sector, REITs are gradually becoming an integral part of the governing system of India.

Role of Real Estate in the growth of Indian economy

Real estate being an ever-evolving sector of India plays a very important role in the economic development of the country. Contributing to other sectors such as cement, brick, paint, steel and other building materials, real estate has a lot to offer. In terms of Foreign Direct Investment (FDI) inflows, real estate is the fourth largest sector in the country accounting to this growth.

Talking about the government support for such initiatives in the country, the Union Cabinet has approved close to 100 Smart City Projects. Moreover, the FDI limit for townships and projects in Special Economic Zone (SEZ) has been permitted to 100 percent. These proposals have improved the overall scenario of how real estate is perceived in India and its future possibilities. Keeping in consideration the fluctuating real estate market in India, it is rather vital to have government support for better outcomes.

Starting from the year 2008, the Indian real estate properties suffered a huge loss. However, from the year 2010, it recovered from the aftermath of a heavily disorganized real estate market. A different approach was used the time people started developing new properties and it was the concept of ‘affordable housing’. Through this approach Indian real estate saw light of the day and went on to become one of the most sought after countries for realty deals.

An independent growth of housing real estate sector has come into the limelight since past few years. It is because of the fact that this segment holds the market share of 70-80% among the entire chain of real estate. One of the other factors impacting the market value is interest of developers in Tier 2 and Tier 3 cities due to availability of land and a marginal drop in prices. After most of the Tier 1 cities filled out and fell short of land spaces, this option made developers re-think their planning structure.

The whole cycle of economy can be easily linked to the real estate growth. This could be explained with a theory that whenever a country’s GDP changes its direction, real estate sector gets affected by it. In simpler words, if the economy is sluggish so would be the realty sector!

One of the key drivers that have been vital in the development of Indian real estate market is foreign investment. Lucrative and easy availability of luxury and affordable housing has attracted many foreign developers as well as investors. Considering India as their next stop for the purchase, buyers are betting high on the growing economy that the real estate market has.

Besides the aforementioned factors and possibilities, demographic factors and economic fundamentals have also become vital to define a country’s situation of real estate investment. The industry needs some more time to mature and till then India needs more global investments. Policies such as Real Estate Exchange Traded Funds (ETFs) and Real Estate Investment Trusts (REITs) are charged up for the big storm coming in. To conclude it in simpler term, it would not be wrong to say that the real estate market of India could be the next stop for investors from whole world.

Real estate scams in India: Here’s how to overcome Them

We have often heard about people getting duped in the name of lavish properties. The truth is that in the world of real estate, there are a very few developers that could be trusted. Intriguing advertisements, heavy discounts, easy mortgage options, are a few taglines used by phony developers to make them sound genuine and trustworthy. However, the truth is completely different than that!

These days, more number of people are registering as builders and working on properties that do not even have proper licenses. While this may not hamper builder’s condition, it could mean a whole lot of legal paperwork for you and your family. Therefore, if you have cultivated a thought of buying property in india, then make sure that the developer in charge should be experienced as well as licensed by the Indian government.

We have all heard about real estate scams that have been surfacing in almost every city in India. First time investors have no or little knowledge about the market trend and hence, get lured into eye-catching schemes and pricings offered by builders. From legal frauds to ‘buy one get one free’ offers, real estate scams are everywhere and now the entire industry has raised alarm to address this issue. It is easier to say that with the rapid growth of real estate sector in India, various frauds and scams are also boiling up. Here’s a checklist of few key points to consider while approaching a developer-

Verification of Documents

While most of us are alert and aware of the correct authentication of property documents, there are several first time buyers who are still not alarmed by the ongoing situation. Prior to any kind of payment to the realtor, it is highly critical to cross check every single detail of the whereabouts of the developer taking care of that project. If required, it is also suggested to hire a lawyer who can make sure that all of the documents are indisputable and scam free.

Property Agreements

While finalizing a deal, both of the parties are mandated to sign authentic property agreement codes and regulations. A buyer seller agreement is a known term in the real estate website and anyone associated with this process has to make sure that there are chances of encountering the case of fabricated documents. This agreement should also have realtor’s complete details, official market brand name and logo to identify it among other brands.

Final Payment

Last but not the least, the most important part of any detail is the amount of money associated with it. An error free mode of payment is preferred by both the realtor and investor. There are several options of paying money these days such as immediate money transfer, money deposit, etc. With all this information, it is also interesting to note that fake realtors do not operate with any big brand name and neither do they have a proper bank account. Therefore, while making the final payment, it is rather interesting as well as important to identify a developer’s true name and identity.

With the help of all these tips and examples, it is now quite evident that no amount of cautiousness is ever enough to examine different investment options for buyers.