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Dark horse the booming economy
By Ethane Shields
REIT is in the process of formulating a legislation for the real estate market.
Real estate India can truly be called as dark horse of the booming Indian Economy. The credit goes to the tax incentives given to the housing finance sector in the annual budget of 2001. Transactions related to buying and selling of commercial and residential properties have faced steep increase in numbers. In the last five years Real Estate has emerged as most the preferred and lucrative sector in providing finance and services to this emerging Indian Economy.
There is a need for creating a congruous and conducive environment for property transaction. The current crisis or the biggest impediment in this sector is shortage of funds and non-existence of efficient legal frame work. Such is the frame work that people often feel apprehensive in buying any property whether one use it for commercial or residential. Moreover commercial real estate investments always remained passive due to the weakening economy, unrealistic property taxes resulting in high vacancy and falling prices.
Let's move on some facts and weigh the intensity of furor surrounding this sector. According to the Federation of Indian Chambers of Commerce and Industry the sector is worth 12 billion dollars and is growing 30 percent a year. In the last two years, the country has added 40 million to 50 million square feet (3.7 million to 4.6 million square meters) of high-grade office space, double what was added in the previous 50 years. Prices for office and commercial space have surged too by as much as 25 percent in the financial hub Mumbai and close to 50 percent in the capital on a rising economy and easy loans. About 80 percent of real estate development is in residential area which clearly shows government's inclination in promoting better standards for living.
Indian newspapers abound with listings for swanky flats with 24-hour backup power generators, swimming pools, health clubs and restaurants in suburban complexes with names like The Bellaire Pinnacle and Palm Grove Heights. With every new real estate firms sprouting like mushrooms and the kind advertisements and facilities they offers , fraud ness seems quite an inevitable feeling that has put this industry into jeopardy.
The REIT in India is in the process of formulating legislation for its introduction and smooth functioning in the Indian real estate market. Once introduced these Indian REITs (country specific/generic version I-REITs) will help individual investors enjoy the benefits of owning interest in the securitized real estate market. Legislative framework, revised investment norms and a favorable investment opportunity, and a clear taxation policy will provide the right kind of investing opportunity in India in the time to come.
About the Author
Ethane Shields is a known author, writer in Real Estate, currently working as a content writer for website http://www.realtymantra.com/ with profound knowledge in real estate, realty trends his special areas of studies are Real Estate and Finance. All your queries about real estate market and realty trends are welcome at ethane.shields@gmail.com.
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