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« Govt. to Bring Energy Code for Commercial Buildings | Home | L&T Bullish on Real Estate Projects »

Lease Market Filling Investors’ Cup of Delight

Easy tax norms and dropping interest of people for property investments ensure a thrust in rental segment in India. As such, soaring rentals and leasing property are to of the hot topics in real estate today.

Talking about the residential segment, it is witnessing a downside in actual transactions, which has turned out to be beneficial for the lease market. But there are hopes regarding capital values to undergo corrections. Rents will go up by 20-25% because may people are putting themselves off from buying a house. Increasing interest rates on home loans is the main cause behind the scenario. However, rental houses will always remain in demand.

Experts view slowdown in real estate necessary to bring about stabilization in property prices as they were increasing exponentially for the past few years. The situation has weakened the consumers’ affordability who envisage themselves burdened by higher EMIs. For that reason, this is actually a kind of correction.

Rentals in India have picked up the pace in the past two months because of reduced investment in residential property. But, there has also been a significant drop in the actual number of apartments for possession.

A number of real estate projects in India are under construction and will be over by the next two to three years. Lack of capital with builders is one of the major reasons for a sharp fall in the supply of housing units. If the problem of shortage of funds continues to persist in future, the small property developers will be wiped off the scene.

Industry watchers see the increase in Indian rental market as a blow to the unrealistic trends in the sector. Considering ongoing fluctuations in the market, it is difficult to predict the nature of trend in future. One factor which can be kept in a direct relation with rentals is interest rates on home loans. If the rates come down, then the rentals can fall.

Another reason for the increase in rentals and lease market is the 30% tax haven that people benefit from rental income. For that reason, the trend is likely to keep up pace in the coming years.

News Published Under:   Real Estate India | No Comments »

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