The Indian real estate sector continues to be a favoured sector for investments from international as well as private investors. In the upcoming years, the residential as well as commercial segments of the real estate industry is set for major growth, aided in no small part by the government's plans and initiatives to boost this sector.
Excise duty reduction on cement and steel will lower project costs and expansion of the interest subsidy on loans will boost developers' interest in this segment. Moreover, tax measures such as increasing the limit of interest deduction on home loans will provide necessary motivation to consumers to increase buying activity and revive demand in the value and affordable segment. Further, demand for space from sectors such as education and healthcare has opened up ample opportunities in the real estate sector.
Exchange Rate Used: INR 1 = US$ 0.0165 as on August 26, 2014
The Government of India has announced a host of measures to spur the real estate sector, which include an allocation of Rs 7,060 crore (US$ 1.16 billion) for the development of 100 smart cities, a reduction in the size of projects eligible for FDI from 50,000 sq m to 20,000 sq m, and having the minimum investment limit for FDI to US$ 5 million.
Delhi-NCR real estate market is expected to move up by 50% aprox in terms of private equity investment in real estate market. In recent years, the real estate investment has been sluggish in Indian Real Estate Market. However, a positive movement is being expected and this reform can be considered as the result of new stable govt. in centre. PE investment scenario in real estate has been in tune with the subdued economy in last one year. This is only recently that it has picked up in the hope of a stable and growth-friendly government. NCR real estate received an investment of Rs 1650 crore in 2013, which is almost more than double of last 2012’s PE investment. PE investment is more guided by an anticipation of profit than anything else and with some slowdown in real estate activity and the possibility of the new government driving the economy out of this is a reason why PEs are positive for India and especially for Real estate market.