Investors eye booming Indian property market

India’s property market is gaining ground among investors as the country’s economy continues to expand and demand for housing rises.

Rising income levels and employment opportunities in the IT industry, manufacturing and business process outsourcing in India are also driving a property boom not only in the cities but also in the suburbs, industry experts said.

In particular, properties in cities like Chennai and Bangalore are getting a lot of interest from buyers even outside the country.

India’s residential and commercial property markets in urban cities are expected to grow 16 per cent on-year in the next 10 years, said T Chitty Babu, president of the Confederation of Real Estate Developers’ Association of India (Credai) Tamil Nadu.

He added that now may be a good opportunity to buy Indian properties as the market is picking up and more developers are launching projects.

Over the weekend, The Hindu: The Indian Property Fair 2010 at the Singapore Expo attracted some 1,500 visitors, organisers said. The fair, showcasing South Indian properties, saw Indian permanent residents, expatriates and first-generation Singapore citizens looking for mid- to high-end properties in India among its visitors.

Mr Immanuel Raj Kumar, general manager for International advertising at The Hindu newspaper, which organised the fair, said the event was meant for communities and non-resident Indians who want to invest in second homes and participate in India’s growing property market.

Exhibitors at the property fair received a lot of interest in properties located in Bangalore, Chennai and Hyderabad. There were also several inquiries for properties in second-tier cities such as Coimbatore, Madurai and Tiruchy, the organisers said.

Some of these cities have seen property prices rise by 10 to 15 per cent in the past year.

“There is a good market for Indian properties in Singapore,” said Mr R Narayanamohan, chairman of the Singapore Indian Chamber of Commerce and Industry, citing that apart from the Indian residents in Singapore, there is also a growing number of Indian expatriates from the Middle East who are settling here.

What attracts these buyers mainly is the need to maintain their roots in the regions where they hail from, he said.

These days, buyers are spoilt for choice. For 3 million rupees ($87,500), a buyer can snap up a 1,000sq ft 2-bedroom unit in the suburbs, said Mr S Faisal Rizvi, a representative from Credai Karnataka. Suburban villas go for between 10 and 40 million rupees.

Foreigners cannot purchase apartments or landed property in India. They can only do so if they take part in large developments complying with laws on foreign direct investments, said Mr N Nandakumar, secretary of Credai Tamil Nadu.

But, as with most other investments, “buyers looking for properties in India have to do their homework,” said Ms Akila Iyengar, director of The Hindu Group of Publications.

That involves checking a developer’s track record and studying contracts. And if necessary, buyers can ask developers for details of previous projects and do field visits of its current projects.

For properties that require progressive payments, making sure the project milestones are met is a must, said Ms Iyengar.

Buyers should also take note of the current infrastructure and sewage system in the area where they intend to buy the property, other industry experts said.

Source : Today – 20 Sep 2010

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