Has The Real Estate Bubble Finally Burst? By Larry Jone At Isnare.com Ezine Articles

Needless to say, the Indian real estate market has been a witness to phenomenal surge in the recent past triggered by the influx of huge investments. This has sent alarm bells ringing in the price regulatory galleries, especially Reserve Bank of India. RBI is hence keen on checking the price hike in all real estate segments- commercial, residential and retail properties in India. It has imposed higher interest rates and clamped external commercial borrowings (ECBs) as corrective measures.

However, this has not dampened the spirits and the real estate india sector is still capable of providing handsome returns to investors. They understand that occasional troughs are usual and these shall once again transform into crests. They only require adopting a flexible and strategic approach to deal with the checks imposed on the market.

Real estate sector in India is still in its infancy and a host of opportunities lie ahead. Trade enthusiasts are optimistic that the current price hike shall subside and stabilize as is the case with almost every new upcoming market. It would be foolish to write off the real estate investing yet, when there is no dearth of conducive factors. The main factor being money.

Compelling effects

Over a 100 private equity (PE) investors have proposed to invest in India, adding up to an already burgeoning line up of foreign investors. This is expected to increase the property liquidity by around 70% in the near future.

They have made recordable returns on their investments and hence the flow of overtly cautious PE fund continues. PE Investors have exhibited an unparalleled trust in the flourishing infrastructure of India. And their trust implies trust from other real estate investors as well.

There is not only one reason for huge investments in India. They include the strong and developing infrastructure, proactive property policies by the government, and excellent locations rife with affluent population. There is a huge social disparity among India's rich and the poorer sections of society. This means that the affluent class wants much more to satiate its housing dreams as does the sect of people which is rising up the social ladder. They also need as good residential properties as they need commercial ones. This gives a gamut of building opportunities to builders and promoters.

Infrastructural development is synonymous to rise in investment and a rise in real estate construction consequently. The rising status of India as a profitable outsourcing destination has spelt boon for the commercial property market as more and more foreign companies are demanding office space. Cities like Hyderabad, Delhi, Gurgaon, Noida etc. are stark examples of such a realty boom.

Future beckons

With the real estate stocks foraying into the stock market, investors got the second best exposure to the real estate sector. Real estate stocks had also gone the conventional real estate way but could not remain unaffected by the corrective measures of RBI for too long. Though it has a long way to go before the stocks can gain momentum, it is surely going to bounce back in to action once the gestation period of real estate projects is over.

Along with mainstream real estate market, stocks shall ensure a regular generation of income for the investors in the long run, if managed smartly.

It can be inferred then that the need of the hour is to shun the buy and wait approach and adopt more 're-s' that is re-positioning, re-developing, re-financing and re-letting. An active and dynamic plan in real estate investing shall protect the investors against odd price graphs.

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