Due to the sluggish behavior, Real estate market India has been termed “investor unfriendly.” UK – centered RICS (Royal Institution of Chartered Surveyors) recently reported that Real estate market India is not up to the global standards.
Global real estate investors do not prefer Real estate market India. This is mainly due to its sluggishness. According to the latest reports India has lost quite a vast number of real estate investors especially foreign investors. The global real estate investors have become highly cautious about their plans to have investment in Real estate market India.
According to Sean Tompkins, the Global CEO of RICS, the Real estate market India has lost its global standards. He warned that the global investors are cautious now. They do not wish to have any sort of investment in India now especially in its real estate market.
The situation is said to be existing in India since 2005. Quoting Mr. Tompkins, The Economic Times reported. The Economic Times report added that India no more remains as an attractive destination for realty investors.
It is estimated that during the period between 2006 and 2009, around $20 billion was invested in India. Hardly an amount of $2-3 billion could exit with good returns. The remaining amount is still invested in India without finding a way profitable way out. This is the case with an investment which was invested six years back.
Increased land prices are one of the main factors which lower the returns. Due to the land prices the properties sold at higher rates to the investors. Investors, however, remain unable to find a taker for their property. Either they are forced to induce the takers with lower prices. This reduces the amount of profit what the investors gain. Besides they have to handle the home buyers’ resistance as well.
What hits the real estate investor worse is that they are not able to exit the market with any profit. In the beginning of this year private equity firms had disclosed their plan to exit. Many of them have exited while some others remain without finding any chance to exit.