A report by research firm Colliers International mentions that there is 85 per cent rise in property investments in India in more than first two quarters of 2017 compared to same period last year. While 1.4 billion was the deal volume last year, this year the registered figure has been 2.6 billion, an increase to nearly 85 per cent for the first nine months of the year says the report titled ‘High Growth, Low Real Rates and Black Swans’.
Though property investments across the country remains reticent compared to its significance and size, the report throws light on the prospects of India as an upcoming and maturing investment market. Experts suggest that as capital funding has been invested in industrial, warehousing and commercial industry, they are the focus areas for growth and more investment. They say that there is possibility of high-value creation for investors that brings more cheers in to the Indian investment market.
The report mentions that conditions remain firm in the Asian property market. But the report also suggested that India fared disappointingly on economic parameters compared to other South Asian countries. However, a growth of 515 per cent was registered in deal volume in the third quarter.
Compared to other countries, the higher rates of interests in India have been pointed out by report by Colliers International. The repo rate decided by the Reserve Bank of India has now reduced to 6.4 per cent. But experts suggest that there would be no change in the coming months in the RBI’s outlook towards repo rates. Only Consumer Price Index (CPI) inflation has witnessed a change with recording low figures and keeping the inflation under control with 3.3 per cent on a year-on-year basis, but other facets of inflation continue to register higher figures. With the inflation staying constant, interest rates are expected to stay below 1.6 per cent in the next few years. Compared to figures of the first three quarters of 2017 which was 3-4.3 per cent, the 1.6 per cent interest rate is seen as a positive trend supporting investment potential in the real estate market.
According to the international report, Japan continued to be at the top with higher investments in the period ending September 2017. Yet, the overall transactions dropped by 12 per cent to $23.3 billion from a year ago. China ranked second with an investment drop of 2 per cent and registering investments worth $22.3 billion.
Compared to the slow growth at the top spots, at the fourth position, Hong Kong, which is set to become Asia’s top investment hub registered transactions of $14.7 billion with a 38 per cent rise. 33 per cent rise in transactions was observed in the investments in South Korea followed by Singapore’s increase to $8.7 billion with 83 per cent increase.
The study also notes down the perils that the investment market should pay heed to. Global financial downs can affect the market along with valuations in equities. The report also highlights artificial intelligence as one of the factors that can impact the financial sector in the negative way by decreasing the demand for space.