How has the real estate market in India changed and what are its development prospects?

Goa: a unique region

Goa is an incredibly interesting and diverse region, divided into two main areas: the north and the south. These regions differ not only in geography but also in the lifestyle of the population. The northern part attracts young people and active leisure enthusiasts, including parties and various events, while the southern part is more tranquil and geared towards high-income individuals looking to enjoy nature and relax away from the hustle and bustle of the city.

Buying real estate in Goa

Although the possibility of purchasing land and hiring productive workers for housing construction theoretically exists, local residents do not always understand these steps and may be opposed to them. Many farmers continue to cultivate their familiar fields, unaware that this land may be privately owned. In such cases, it is advisable to exercise caution, as local authorities are not always willing to support foreigners in resolving disputes.

Based on this, the best way for those looking to purchase real estate in India is to collaborate with Russian real estate agencies or foreign construction companies that are already operating in Goa and are familiar with local regulations.

Economic prospects of India

Speaking about the prospects of the economy, it is worth mentioning that the organization Global Property Guide conducted a study on the state of the Indian real estate market, focusing on its development and existing issues. From 2005 to 2007, the Indian economy demonstrated impressive growth, reaching 8.9% per year. This made the country one of the fastest-growing in the world. The liberalization of key sectors of the economy in the 1990s led to an increase in foreign investments, which, in turn, contributed to a decrease in unemployment, a growing interest in housing, and the active development of the construction sector and telecommunications market.

Slowdown of economic growth

However, the year 2008 marked a time of economic slowdown. The global financial crisis significantly impacted India, leading to a reduction in growth rates to 7.3%. According to forecasts from the International Monetary Fund, a further slowdown is expected in 2020, with gross domestic product growth projected at 5.4%. Experts also believe that unemployment will rise, particularly in key sectors such as IT, finance, and industry, which have been under pressure from the crisis.

Real estate market forecasts

In 2009, specialists from Edelweiss predicted that the Indian real estate market would face stagnation for at least four years, with expected housing price declines of up to 30%. Analysts from Global Property Guide also made similar forecasts, citing a low level of mortgage lending (less than 5% of GDP), a halt in construction projects, and weak rental yields.

Positive changes in the market

Nevertheless, by the end of summer 2009, a more optimistic picture was emerging: the reduction of mortgage interest rates from 13% to 8% contributed to an increase in sales volumes in the real estate market. This was particularly evident in the second quarter, when the volume of transactions in major cities like Mumbai and Pune increased by 20-22%, and in the third quarter, the growth reached an impressive 30-40%.

Thus, despite the challenging times and economic challenges, the real estate market in India has begun its journey towards recovery and adaptation to the changes brought about by the crisis.

Analysis of current trends in the Indian real estate market

According to information provided by the analytical firm Cushman & Wakefield, there is a significant increase in residential real estate prices at the beginning of the autumn season, ranging from 5% to 15%. Analysts suggest that by 2013, interest in real estate in major urban centers could rise to 4.5 million properties, while at the national level, this figure could reach 7.5 million.

Research conducted by the Confederation of Real Estate Developers of India (CREDAI) shows that the total investment in the Indian real estate market could potentially reach approximately 6 billion dollars in the coming year. This interest from investors is largely driven by the increasing demand for residential construction projects.

Legal aspects and prospects of legislation

Regarding the legal aspect, experts note that the real estate market in India is not characterized by a high level of maturity; many processes are insufficiently regulated, and the effectiveness of government oversight remains low. However, new regulations are gradually being introduced to improve the situation.

In particular, the Indian government plans to approve a law regulating the real estate market, aimed at organizing the construction sector and managing residential properties. The main goal of this legislation is toincreasing trustBoth from the perspective of investors and ordinary buyers towards the Indian real estate segment.

Expected changes in the construction industry

It is expected that with active government intervention, construction processes will become more structured, and the management of the housing stock will become more qualified. Developers will be required to:

• Register your projects with the relevant regulatory authority before starting sales.
• Avoid receiving advance payments from clients before signing the final purchase agreement.

In the current conditions, developers are requiring buyers to pay 20-30% of the property value even before the official deal is finalized. Strict penalties are in place for violations of the new legislation.

Responsibility for violating legislation

Developers who engage in their activities without prior registration may face:

• A prison sentence of up to three years;
• Monetary fines that will be calculated as a percentage of the cost of the construction project;
• The simultaneous application of both measures of punishment.

Current situation in the market

Regarding the current situation in the market, the rapid development of the Indian real estate sector has faced unexpected changes, which are reflected in a decline in activity. According to a report by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), the demand for high-end real estate has decreased by a staggering 50%, while the reduction for affordable housing has been 10%.

Foreign investments have significantly decreased, and although local developers have attempted to secure financing from Indian banks, this process has proven to be quite challenging for most of them. As a result, many projects are on hold as developers face a shortage of funds to complete construction.

Payments for the apartments that have found buyers are coming in regularly; however, the overwhelming majority of the offered apartments remain vacant, which leads to a decrease in working capital.

In the current economic situation in the Indian real estate market, construction companies are changing their focus and starting to turn to more affordable housing. However, even with these changes, many companies are facing a shortage of orders. Since July 2009, the Indian real estate sector has been experiencing the formation of a so-called "bubble." Some construction organizations have begun to raise housing prices in response to the growing interest from buyers. According to the Association of Developers of India, during the crisis, housing prices fell by 25-30%, but by the summer period, there has been a recovery in prices in the range of 10-15%.

Clients of the Indian real estate market

Foreigners make up the majority of clients in the Indian real estate market, with buyers from the UK, Germany, and the Netherlands taking the lead. According to a study by Interestate, Russian citizens began actively investing in Indian real estate about three years ago.

Rules for withdrawing nested funds from India

According to existing laws, the procedure for withdrawing invested funds from India is only available after a three-year period. As for acquiring real estate, it should be noted that, according to data from the Interestate agency, this process does not automatically grant residency. Although there are some exceptions, they are quite rare.

Possibility of obtaining business visas

An alternative option for foreigners could be obtaining a business visa, which allows them to stay in the country for up to 180 days a year. Initially, this visa is issued for one year with the possibility of extension later on.

New visa practices in India

Recently, the Indian government is considering the introduction of a new practice that would allow citizens of certain countries, including Russia, to obtain visas on arrival. This information is reported by the publication "Times of India." The changes in question primarily concern tourists planning to visit the country.

Purchase of real estate for foreign citizens

For a foreign individual, the process of purchasing real estate in India turns out to be extremely complicated. At the same time, a legal entity can become a property owner without much difficulty, but this requires registering a company with the participation of a local citizen, who must own at least 1% of the shares.

Costs for company registration

According to Interestate, the cost of registering such a company is approximately 1700 euros, and the entire process takes just three days. Additionally, acquiring an existing business is not prohibited.

Expenses for maintaining the company

As for the company's support expenses, the annual costs amount to about $750.

The process of closing a deal

When the moment of closing the deal arrives, the buyer selects a property in the primary market. The interested party must make a deposit of $4,000, which serves as a guarantee of the client's serious intentions to the developer.

However, the developer has the right to either reject this deposit or request 10% of the total purchase price of the property. After that, the property is taken off the market, and both parties sign a preliminary agreement that outlines the payment plan and provides a detailed description of the property being sold.

Payment schedule

The payment schedule usually looks as follows:

• 40% of the total amount is paid upon signing the preliminary contract.
• The remaining 10% is paid upon completion of various stages of construction.

Typically, the process of constructing buildings takes about a year, although in some cases, a payment plan of up to two years may be provided after the completion of construction.

Completion of the deal and documentation processing

Financial resources are provided to the developer according to a pre-established schedule and are transferred from the bank account of a company registered in the buyer's name. After the project is completed and the property is handed over to the new owner, both parties sign a main or general contract, which is notarized.

In addition, the object is transferred to the buyer through a separate act, which is also certified by a notary.

The right of ownership of acquired real estate

The ownership of the purchased property remains with the company. Usually, all documents are handled by the developer, but this is not mandatory.

Therefore, it is strongly recommended to engage a lawyer, preferably a local one, who can provide professional advice on Indian law. This approach will help avoid potential legal complications and ensure safer interactions with all parties involved in the process.

Advantages of professional assistance

With qualified assistance, the process of acquiring real estate can be significantly simplified, and you can be confident in the legal correctness of all transactions.

Conclusion

It's incredible how diverse and multifaceted the real estate market in India is, especially in such a unique region as Goa. I've observed how this place, divided into northern and southern parts, creates unique conditions for different groups of people. While the southern part attracts those who enjoy a peaceful retreat and solitude, the northern part is full of life and the energy of youth. However, despite the potential benefits of investing in real estate, it's important to keep in mind the complexities associated with the local legal system and agricultural traditions.

I also noticed that despite the slowdown in growth caused by the financial crisis, the Indian economy remains dynamic, and the improvement in mortgage lending conditions indicates a revival of interest in real estate.

Key points

• Market diversity:The southern part of Goa is for those seeking tranquility, while the northern part is for those looking for an active vacation.
• Investment potential:Interest in real estate is increasing due to falling mortgage interest rates.
• Legal system:New laws are gradually improving the situation in the market, but many processes are still underdeveloped.
• Market situation:Demand is decreasing, especially in the economy segment, which is causing uncertainty among developers.

Prospects

Despite the current challenges, I remain optimistic about the future of the Indian real estate market. Investment opportunities in residential projects persist, and I believe that through consistent reforms and adaptation to market demands, this segment will be able to grow and offer new prospects not only for local clients but also for foreign investors.

It's important to stay vigilant, use professional real estate services, and keep in mind the legal aspects in order to invest as profitably as possible in this promising field.