Anshuman Magazine, Chairman and Managing Director India, CBRE; articulates his opinion on the development and regulation of Real Estate, he also feels that participation of private players is crucial when it comes to accomplishing the goal of Housing for All scheme. He also suggests that softening of interest rates will improve demand in the housing sector. Excerpts:
- Team Estrade: What opinion does global real estate investors have of India at present?
Anshuman Magazine: As the economy in India begins to revive, foreign investors are re-evaluating the Indian market, while the domestic institutional investors have begun to increase their investment in the real estate sector. The recent policy initiative by the Central Government of easing Foreign Direct Investment (FDI) norms across 15 major sectors of the economy, including construction development, single brand retail trading and duty free shops, manufacturing, and broadcasting, among others, is expected to generate a sense of optimism among overseas investors
Currently, real estate funds focused on India are reportedly seeking to raise new capital; most of which is aimed at residential projects. Since 2005 when India permitted FDI in the real estate sector, approximately US$24 billion worth of foreign investment has entered into the market.
- Team Estrade: What’s your view on the Real Estate (Regulation and Development) Bill?
Anshuman Magazine: Although the Real Estate Regulation and Development Bill aims at making India’s realty sector more transparent and accountable, Government authorities remain out of the ambit of the Bill—leaving a core concern regarding delays in project approvals unresolved. Single and time-bound online clearance procedures need to be accorded for development projects in consensus with various other Government bodies.
“Private sector participation is crucial for the success of Housing for All scheme”
- Team Estrade: Most residential developments continue to be in the premium and luxury categories. What happened to the concept of affordable housing?
Anshuman Magazine: Affordable housing projects are being initiated by various development authorities in the country, specifically targeting the size and catchment as defined by the Government. As of September 1, 2015, the Central Government approved 21 affordable housing projects that are currently under-construction in eight towns and cities of India. For the success of the “Housing for All” scheme, private sector participation is crucial. Over the past year or so, private developers have mainly concentrated on the mid-end to premium housing segments, depending on location, pricing and supply. Going forward, the availability of long term, low cost funds for developers and home buyers along with availability of cheaper land, will encourage more private players to enter the affordable housing segment.
- Team Estrade: How is the outlook on Residential property in next 1 year?
Anshuman Magazine: Although the residential market in India has remained subdued over the past two years or so, the prospects for an upturn in market sentiments is looking better. The overall market outlook remains optimistic. The Government’s “Housing for All” program, Smart Cities initiative, and revival of large urban infrastructure projects, combined with an improving GDP growth and softening of interest rates will improve demand in the housing sector, going forward.
CBRE India: Approx $24 billion FDI has entered Indian Real Estate