When Mumbai offered a minimum average rate of property at Rs.7000/- per sq.ft. in suburbs and Rs.5000/- per sq.ft. in extended suburbs, NRIs and MNCs were weighing the option of investing in Pune and two tier cities. Mohali sold an acre agriculture land for Rs.5 crore, Delhi and NCR have witnessed highest historic land rates followed by Pune, Ahmedabad, Bangalore and Hyderabad, the situation was dismal for individual investors who wanted to just save taxes by paying housing finance installments and at the same time have a second home.
Housing finance rates have capitalised on the inflation in the country and realty funds wanted to invest in primary market like funding builders at an early stage. Since huge funds are at stack, investors do not want a correction in the property prices. It will kill their depositors faith and hence they want it to be a rising trend.
Buyers are helpless and there were a big slid on the sale though the rates were reportedly constant or touching new heights. Individual investors, now since liberalisation in investing abroad to the tune of US$ 1 lakh in a year is allowed, are looking for oversea opportunities.
Dubai is the most famous destination to park the funds in real estate. Many projects are offering free life time visa to the region if one buys an apartment there. For a mere Rs.40 lakh one can have an two bed room apartment in an future international city. Taxation is relaxed because of free trade zone hence rentals yields and appreciations are not liable for any tax in the region. It is only when you repatriate, Indian Income Tax is applicable.
Exhibitors from Australia, UAE and US have been participating in various Indian Property Exhibitions, offering huge returns for small investments. While UK developers stay in hotels and luring individual investors for investing in farm land with a promise of future town planning which will include the plots on sale within the boundary of the city limit of London.
A huge amount of funds and High Net-worth Individuals have been investing with these overseas opportunities. When a two bedroom apartment at Mira Road is compared with high tech city of Dubai, investors opt for Dubai because for same amount of investment he is getting world class constructions and infrastructure with potential appreciations.
Builders are not left behind to capitalise on liberalisation. Hiranandanis have been constructing in Dubai, so is the case with many leading developers are developing in UAE. Oman, Mascat, Behrin and other part of region is witnessing huge construction projects from India Developers. Since there is no land available in India, builders are looking to tap the opportunities overseas. In the process, almost every big brand in India have projects in Middle East, Europe and Far East. Land being a esstential commodity to produce accommodation, and is now captured by leading corporate like DLF, Reliance and others, prices have gone beyond imagination. If the situation persists, there will be only ten developers in India who will be constructing on their land banks for next two decades with full situation of monopolizing and cartelling on real estate prices.
Under the circumstances, there is huge movement to quit India in 2007, after one gets open permission to invest outside India. We were witnessing for 60 years, our trained professionals like MBAs, Architects, scientists, academicians and businessmen have been quitting India for want of opportunities. This year they are allowed to do so with the permission.
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source: accommodationtimes.com
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