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Real Estate >> News
Blend of Regulatory Norms and Growth of Indian Real Estate
By
siliconindia
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Wednesday, September 11, 2013
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Irrespective of the sluggish economy and the subsequent liquidity crunch in the market, Indian realty sector has been expanding the scope of its operations in all sectors of construction. It has considerably remained insolent to the anxiety triggered by continuous fall in the value of rupee and the retraction of foreign investments. Over the last decade, FDI and NRI investment pools have persistently found their channels into the Indian construction business.
Considering the negative sentiment in the commercial arena and the blocks in the manufacturing output in the economy, the Indian government is contemplating to relax the FDI norms in order to attract a larger quantum of foreign investments in the realty sector. From minimum built up area requirement to be condensed and minimum lock-in period to be redefined, the govt. envisions to bring down the minimum investment requirements in the field of foreign investments.
In the present day, a minimum 10 hectares of land shall be owned in order to develop housing plots and the construction of apartments through FDI investments needs to have a minimum total built up area of 50,000 square meters. So in accordance to the prerequisites mentioned above, 100% FDI is permitted through the automatic route in realty only along with certain riders. Therefore, in order to induce liquidity in the realty ecosystem and smoothen the investment channels, the government is planning to execute few vital reforms.
Various (real estate) reformative reforms have been witnessed to be initiated in different quarters of stakeholders and regulators in the recent past. Earlier in the year 2013, the Reserve Bank of India (RBI) had reduced the external commercial borrowing rates for the residential sector and the National housing Bank has also been striding towards growth and development of the realty sector. Likewise, The World Bank has recently sanctioned a funding of $100 million for the affordable housing projects to be implemented over next five years.
Currently, the residential real estate sector has hands full with fast emerging venues of funding, reformed and favorable regulatory policies and growing demand of residences in all directions in the country. However, the final worthy aid in the future is expected by the transparency and streamlining to be facilitated by ratification of the regulatory bill that has already been tabled in the Rajya Sabha. Future for real estate in India looks to be maturing with opportunities of growth and development in all its subsectors and regions.
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