India Witnesses Reduced Foreign Real Estate Investment

India recently lost a bigger amount of foreign real estate investment. UK – centered RICS reported that India real estate market in has become investor unfriendly.

Royal Institution of Chartered Surveyors RICS said that real estate investment in India is not preferable due to many reasons. The existing real estate market situation is totally against the investors.

Numbers of foreign investors are decreasing in India. They are highly cautious about having some real estate investment in India.

India real estate market has been sluggish throughout the year 2012. This has inversely affected the investors’ interest. India real estate market has failed to meet the global standards, said Global CEO of RICS, Sean Tompkins.

In his opinion the foreign real estate investors are not interested to have any real estate investment in India. Quoting Mr. Tompkins, The Economic Times reported that the situation is well present since 2005. India failed to become an attractive real estate investment destination.

Real estate investment worth $20 billion was invested in India during the period between 2006 and 2009. Only $2-3 billion could exit successfully with improved returns. The remaining amount is still waiting to exit with profit. This lack of profit even after being invested for almost 6 years is embarrassing.

The property prices in India have gone far higher. As a result the real estate investors are able to gain only a narrow profit. According to the real estate experts the prices have gone up mainly due to the increased land prices.

The building costs and labor charges have also are increased. The real estate builders have no way to give out their properties at lower rates. The home buyers show higher resistance too. All these have affected investors sharply. With these existing facts the investors’ margin fell sharply.

Decreased returns force the investors to exit the market. Many of them are unable to exit with minimum profits even. This is the same reason which prompts even the private equity firms also to quit the real estate investment plans.

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