Growing Foreign Investments Bolster India's Real Estate Market
With the influx of foreign investments in India's real estate sector, the long-term prospects of the market appear increasingly optimistic, as noted by HDFC Chairman Deepak Parekh.
Positive Outlook for Commercial Real Estate
“Long-term prospects of commercial real estate market continue to be positive owing to growing opportunities in sectors like healthcare, hospitality, logistics, and education,” Parekh mentioned during a press conference in Mumbai.
Foreign Interest in Indian Real Estate
There is considerable interest from foreign investors to participate in India's real estate market, with investments being made through private equity and foreign direct investment (FDI) routes. Parekh highlighted that in Q1 FY’09, approximately 20% of FDIs were directed towards the housing and real estate sectors.
Housing Segment Demand
Parekh emphasized that the housing segment harbors immense demand, provided the pricing is correct. “Given the huge housing shortage, it is unlikely that there will be any saturation in the market for a long time to come.” He advised potential buyers, “If you find the right house, go ahead and buy it.”
Financial Prudence
Regarding loan considerations, Parekh cautioned against overstretching, recommending maintenance of a sufficient buffer. He pointed out that interest rates over a 15-year period will inevitably fluctuate.
Sector Consolidation and Innovation
Parekh suggested that the current scenario might necessitate some consolidation within the real estate sector. Additionally, he hinted at the potential need for creating innovative financial instruments to support financially distressed developers in navigating the present period.