Do Foreign Investors really find Indian realty sector worth their money?

November 22, 2006	(Be the first to rate this story!)  Loading ...
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Largely fragmented Indian realty sector has been on the upswing and is turning out to be hot attraction for the foreign investors. However, these potential future investors seem to be little baffled about whether the gains are worth the effort necessary to acquire them.

Over $8 billion of foreign investment is estimated to flow in the year 2006-2007, of which 26.5 percent will be in real estate, says study released by the Associated Chambers of Commerce and Industry of India. Such a boom will certainly trigger a change in the direction of economic policy in the country.

Since, the realty sector in India continues to be so hard to navigate, property players doubt the possibilities to get involved here. Adding to woes of foreign investors is a compulsion to obtain necessary approval from the RBI prior to purchasing real estate in India. Along with being an entirely new construction, the location involved should fetch an area more than 50,000 square feet, or 4,650 square meters.

Poor infrastructure of some Indian cities might serve as a bottleneck to further plans of realty developers, who have built on what experts call green field sites. However, this is not an end to the problems. Tax policies in India have forced most Indian owners to divide their property into smaller unit which are further entitled to numerous partners, each holding their individual share.

Experts believe that India will become a very important part of the real estate business. But is very early days in India, and there are a lot of restrictions.

News Published Under:   Real Estate India, Foreign Direct Investment in India |

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