The Indian real estate market is back in demand after the Narendra Modi-government took control of the country's political and economic health. Several overseas investors are flocking to the property sector as the country has been showing signs of a strengthening market.
According to The Wall Street Journal, major foreign investors like JP Morgan Chase and Blackstone Group are putting their faith in the market, but cautiously. Investors have now become "choosy" about whom to do business with and a company's trade history will play a big part this time around.
In 2005, after the Indian government loosened investment laws and introduced new property regulations, several overseas businessmen took advantage of the raw market forging new partnerships in the property sector. Some made direct investments in real estate companies.
However, after the residential and commercial property market started weakening and the economy lost luster, many partnerships dissolved. Some got embroiled in legal battles and things took a turn for the worse.
But now that the Modi government has taken over from the Congress, tables seem to be turning - at least for the housing market.
India has acquired about $675 million worth of foreign investment in the first quarter of 2014 alone, which is about double the amount of what it secured a year ago. The investors are reportedly showing more interest in commercial properties at the moment, according to the Financial Express.
The foreign investor optimism is also being echoed in the domestic market players. According to the Times of India, faster decision-making and better policies are boosting the property market. A recent Knight Frank report revealed that there is a high degree of confidence in the housing market within the country.
"The optimism shared by real estate industry stakeholders about current and future sentiments in real estate augurs well not only for the sector but also for Indian economy. The findings of this report corroborate the all-round optimism in the economy witnessed as a result of Central Government's resolve to push reforms through bold decisions," Didar Singh, Secretary General of FICCI was cited by the TOI.
"Recent Union Budget announcements for housing and real estate sector will further spur growth of this sector as well as improve future sentiments of stakeholders," Singh added.
