Indian real estate sector is witnessing a rise in investment inflow on account of the ongoing transformation in the business environment and also due to increase in funds infusion by foreign and domestic institutional investors into the sector. According to the Active Capital report by Knight Frank, the sector recorded a whopping 137% increase in foreign investment in the country in a matter of two years.
“Foreign investments in Indian realty rocketed from $3.2 billion during 2011-13 to $7.6 billion during 2014-16 recording a staggering surge of 137%. Capital raised by domestic players was equally healthy. From $1.3 billion it almost doubled to $2.4 billion during the same period,” the report said. India also grabbed the highest interest of investors in the emerging markets.
“India, among all other EMs (emerging markets) has attracted the highest interest of global investors on account of a stable government and implementation of path breaking reforms such as the Goods and Services Tax (GST) that would formalise the economy,” the reported quoted Dr Samantak Das, chief economist and national director, Research, Knight Frank India, as saying.
The government has initiated a number of policies including the implementation of Real Estate (Development and Regulation) Act, the Goods and Services Tax, Housing for all and the Real Estate Investment Trusts over the past two years.
“The global economy has started recuperating with improving job prospects, decline in unemployment rates and rising rate of inflation in the developed economies.
Investors in these countries are expecting diminishing inflation adjusted returns. With the strengthening of domestic currency they are finding assets in emerging markets (EMs) cheaper from an investment perspective,” Das said.