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In the eyes of many investors we are on the verge of a recovery but so far improved figures have yet to materialise. Indeed in the short term it looks as though some developers will hold back on releasing new stock into the market. So, it will take some time to clear this unsold stock and in the meantime developers are less likely to take on new developments. There is no doubt it has been a difficult couple of years for the Indian real estate market for a variety of reasons. In the longer term there are reasons to be optimistic and the recent successful prosecution of a real estate company found to be cheating customers has improved sentiment. Transparency is the name of the game going forward but there is also a need to get rid of the unsold stock overhanging the market, as quickly as possible.
While recent government changes will ultimately assist long-term growth in the Indian real estate market, there are signs that the market may well be running out of steam in the short term. A number of investors have come forward to query why many projects which should have been finished from 2013 are still waiting to be signed off. This comes at a time when the market is coming to terms with recent monetisation changes which were targeted at the use of criminal funds and alleged money-laundering operations. So, why is the Indian real estate market under so much pressure? Perhaps the greatest concern is how many developers used deposit funds in years gone by when the market was booming. It turns out that many developers used deposit funds to grow their land bank rather than investing directly into the relevant development. This is all good and well in the boom times with buyers stepping forward on a regular basis and competition for properties. However, once the market started to weaken ever so slightly the cracks began to appear. As you might have guessed, a number of developers across India are now experiencing cash flow problems with some being forced to sell off their land assets at a loss. The payday loans in fresno ca fact is that more and more developers are struggling to raise sufficient capital to finish ongoing projects which will obviously have a knock-on effect to future plans. When you bear in mind that a number of properties should have been finished in 2013 this does not bode well for some developers. It would appear that many developers assumed that the Indian property market boom would continue forever and a day. While they should have been reinvesting deposit funds into the actual developments they were already looking at the next property development. This could potentially see some leading Indian property development companies fall by the wayside or perhaps be forced to merge with competitors. Recent statistics suggest that the current housing stock would take four years to sell at current rates as opposed to just over a year back in 2009. If anything this perfectly reflects the glut of property right across India and the fact that this will act as a drag on prices for some time to come.
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In many ways the Indian government has been encouraging non-resident Indians to invest in the Indian market but many are starting to get concerned. It will be interesting to see how Indian property prices react in the short to medium term after the 3. Investors and developers are still coming to terms with recent regulatory changes, payday loans in fresno ca as well as the monetisation issue, and hopefully this recent dip is only a short-term issue. However, it is concerning that at current rates of sale it would take four years to sell the current stock of Indian housing. As you might expect from a bill which increases the regulatory burden on housebuilders in India, the response to 20 major amendments to the original bill has received a mixed response. The Indian real estate market has been identified by many experts as a major growth market of the future. It has a huge population, growing wealth and an economy which is well positioned for long-term growth. You would expect these to be the main ingredients of a buoyant real estate market but transparency and regulatory protection for investors and housebuilders has been sadly lacking. The real estate regulatory bill has taken a little time to complete but has the potential to revolutionise the Indian real estate market. By forcing these developments to register with the regulatory authorities this will give investors more confidence. Another interesting development relates to the deposit required by builders to complete developments which have been presold. Prior to this latest bill many of the regulations in place seemed to be skewed towards developers and construction companies.
However, in light of the changes builders will now be forced to pay an equal rate of interest to homebuyers in the event of defaults or delays in completing developments. The liability of construction small payday loans in fresno ca short term loans for bad credit personal loan companies in relation to structural defects has also been increased from two years to 5 years. There is no doubt that these changes will give confidence to investors who have perhaps been concerned about the regulatory cover in years gone by. It may be a different story obtaining compensation and interest charges from construction companies but that is a totally different matter and one for the courts. One more encouraging outcome of the new real estate bill relates to the flow of finance for building projects, for both homebuyers and developers.
This greater transparency, rewriting of the regulations and clarity with regards to financial obligations for all parties should give Indian banks greater confidence going forward. When you bear in mind the enormous potential for housebuilding across many areas of India this could be a game changer and one which could see yet more international investment pouring into the region.
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Investigate if the said plot is prone to any environmental hazards? Find the asking rate of the land owner before making a counter best online payday loans instant approval proposal for the said plot? To say that 2015 has been a difficult time for the Indian real estate market is something of an understatement. The buoyancy of the previous couple of years soon disappeared along with confidence that developers would actually be able to deliver developments on time and within budget. As a consequence, there is a massive backlog of properties available in the Indian market with investors on the sidelines waiting for this overhang of property to be taken out. The bulk of this is likely to come from overseas investors amid signs that the Indian government is more receptive to interest from overseas. Indeed the slackening of laws restricting overseas ownership of Indian real estate has been well received and 2016 is likely to see the best of this particular move.
It is hoped that these fundraising exercises will allow much of the unsold property to be taken out thereby reducing the overhang on prices. Until the majority of this unsold property is taken out it is difficult to see why investors will suddenly en masse invest in Indian property. As we touched on above, private equity funds will be cash rich in 2016, the troubled overhang of rental properties will likely start to reduce and tighter regulations covering developers and investors should inject more confidence. There is a growing belief that property developers have learned lessons from the past and are unlikely to make the same mistakes as years gone by.
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