Why Real Estate Investment Is More Attractive Nowadays

Investment is essential for the growth of wealth. One of the safest sources for investing has been real estate investment in India. This is a sector which is driven primarily by capital.

The vicious circle here makes the construction costs go up as a result of higher land acquisition costs pushed up by capital. A notion has been doing the rounds that real estate investments have lost affordability due to the sky high current prices heading for correction.

The recent budget brought in by the new government has made real estate investments appear more attractive with some much needed fillip in the form of tax concessions for REITs.

Real Estate Investment Trusts are instruments which are listed. They will afford an opportunity to existing players to deleverage their holdings as well as provide exit options as they are exchange tradable.

The new tax incentives allow existing investors with a better business tool as previously REITs had failed due to double taxation concerns.
 
The proposal announcement has given a push to the stock prices of key players and the confidence boost needed here. Further, the financial watchdog has also announced a similar product for the infrastructure sector in the form IITs or infrastructure investment trusts.

The dilapidated scenario will definitely see an upsurge as this announcement will mean international and domestic investment fund flows for smart city development. The key cities for real estate investment remain Surat, Chennai and Nagpur.

These cities have recorded the highest increments in house prices (annual). The erstwhile favourites such as Delhi, the capital city saw price fall to the tune of 1.49% this year (annual).
 
The new government at the centre is creating a sentiment which might very well see prices soar. The GDP growth projected is set to improve than the current numbers. It has been that the growth in GDP is one of the most vital variables in the prices of properties.

Thus, buyers’ pockets may very well see money with a GDP increment boost to the prices of real estate in the country.
 
The recent budget also announced higher tax benefits for home loans which could very well see a rise in demand for the sector. Home equity loan for investment in the real estate scenario will also become viable if the prices see an upward surge.

Investors are however advised to be very cautious as costs are still high and banks are still reluctant to lend to real estate companies. There are presently less buyers and more sellers and in order to avoid negative returns its best to go long term.

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