At a time when the real estate market in India is experiencing vast changes in terms of policy, controls and regulations and a number of laws are being passed to bring out some order in this highly unorganized market, the Indian real estate market is being seen by foreign investors as a great opportunity for them to invest. The Chinese real estate developers and investors have shown a great inclination to invest in India, buy lands, develop properties and play ball in the real estate market which is all set to become much more controllable following the laws like RERA. Chinese investors, till now, had shown interest only in the telecom and specifically the mobile handsets sector of the Indian economy wherein almost half of the newly shipped phones were either made in China or were of Chinese companies. However, this is set to change if the words of a popular daily newspaper in Beijing are to be believed. There has been an increased interest among the Chinese investor and developer fraternity to capitalize on the growing Indian economy and specifically the real estate sector which is booming at the moment and looks very lucrative for investments.
However, the Chinese have also been warned that entering into India in the real estate sector was a move which required great thought and planning as the real estate sector in India is more treacherous than what it looks from the outside. The builders in India themselves have faced various problems at various levels and this is what prompted the Chinese to throw a word of caution at their investors to prevent their money from going into waste.
Although China itself is a tough market and obtaining land there also is a cumbersome process requiring approvals at various levels. However, the real estate market in India is a different ball game altogether. The changing policies, the approvals and permissions needed from various levels, the terms and conditions which are even sterner for foreign investors and laws protecting the consumer interests against malpractices make the real estate sector in India highly unpredictable and volatile. Also, it remains to be determined whether the consumers in India are ready for the real estate boom which might take place due to these investments by the real estate developers.
Builders in India have already come under the radar of the government through the various laws that have been enacted to protect consumer interests and hence the territory needs to be tested for fresh investments. Also, following the demonetization move, real estate, which was primarily used by the wealthy class to liquidate its black money, has become a tad less lucrative option for investments and hence the growth seems to have declined a bit in the past few months. At such a time, the Chinese investors are being cautioned to pump in money for development of property in India only after proper planning and weighing of the pros and cons in the long term.