30-Apr-2023  |  Investor Arena

How Safe Is It To Invest In Real Estate in India?

How Safe Is It To Invest In Real Estate in India? it is a common doubt and you get all your questions answered here.

How Safe Is It To Invest In Real Estate in India?

Real estate in India is a popular investment option along with traditional saving tools. The pandemic, the loss of GDP, and recessions might have slowed down the growth of this sector for the time being. But, The real estate sector has got revived and it’s booming again. The reasons are the unchanged repo rate of RBI, rising demand for residential and commercial properties etc.

A report says that 77% of the total assets of an Indian household are real estate. Many people believe in building wealth through property investment in India. However, amidst this popularity, one cannot ignore the safety concerns related to real estate investment in India.

They include non-timely delivery of the projects, poor building material, builder’s credibility etc. Hence, here comes a question. How safe is it to invest in real estate in India?

According to finance experts and investment consultants, real estate in India is a profitable source of building wealth. Despite certain odds, it is safer than the equity market, commodities, metals market etc., for many reasons.

In this blog, we will discuss the reasons in detail. Also, we will talk about how RERA or Real Estate Regulatory Authority has changed the scenario of Indian real estate, making it safer than ever. Let’s proceed.

Why Investment In Real Estate in India is Safe:

Despite many negative aspects, investment experts affirm that real estate in India is a safe option for building wealth. The reasons are:

Less susceptible to fluctuation, theft, etc.:

Real estate in India is safer than other investment options like the stock market, cryptocurrency, gold, etc. For example, the stock market is volatile. Compared to that, real estate is less volatile. Anyways, gold value is not volatile. But, the concerns for theft and storage issues are there. Cryptocurrency is just a faux and not real at all. Real estate assets don’t have any of these issues. Hence, real estate investment is more reliable.

The rapid growth of the sector:

Unlike many other sectors, real estate in India has bounced back well after the pandemic. According to an Economic Times report, Indian real estate can grow to Rs. 650,000 Crore by 2040.

The renowned consultancy firm CIRIL has also mentioned in its latest report that the real estate sector in India will contribute 13% of the country’s GDP. So, your investment is safe here. However, despite the overall growth, finding suitable properties to invest in is important. A professional real estate investment consultancy in India can help you in identifying a safe real estate property offering good returns on investment like Golden-I, Golden Grande etc.

Growing demand for homes:

The global attention has now shifted from China to India. Multiple international companies are coming here. So, more job opportunities are on their way. Also, there is an influx of money. So, investing in real estate in India is a profitable decision in the current scenario.

High return on investment:

Traditional savings like banks give you a nominal interest on your investment that does not surpass inflation rates. But real estate assets can give you a higher return. Thus, you can gain actual profit by overcoming inflation.

Lower Interest and Tax Savings:

Buying homes is profitable now as you are getting home loans with a lower interest rate now. Affordable housing loans are also available from reliable banks and financial companies. You can save tax on the repayment of the home loan.

As per Income Tax Act, an applicant may claim a deduction up to Rs 1.5 Lakh under Section 80 C on principal repayment. Also, they can claim for the same of up to Rs 2 Lakh under Section 24. Thus, returns on your real estate investment are better than ever.

The intervention of RERA:

Taking home loans and buying properties with them is a reliable investment option always. Now, it becomes safer as RERA handles the deals. RERA Act protects the interests of homebuyers. It is now compulsory for the builders to provide all project details publicly.

So, the risks of scams and fraud are low. In fact, without a RERA no., no property in India is valid. Also, it has streamlined the legal procedure of buying properties well. Hence, it reduces the hassles of homebuyers.

Anyways, RERA is a vital factor in real estate in India. If you want to know how safe property investment in India is, you must know a little more about RERA and you can visit a professional Real estate consulting company to know more about it.

RERA in Real Estate in India: Learn the Details

Buying lands and homes are age-old methods to build wealth. But, due to lack of transparency, legal hassles, etc., many were afraid to do so. RERA has filled the gap making real estate investing transparent and easy for all.

You can check the project details on the Rera website with the help of Rera registration no. of the website. It makes people feel safe before investing their hard-earned money. Anyways, it was not an overnight game. Let’s see first how RERA came into the scene. Further, we will talk about how it makes investment in real estate in India safe. 

How It happened:

There was a time when people’s faith in real estate in India was dwindling because of so many irregularities. And, the real estate market had become a reason for the country’s economic slowdown. RERA Act was introduced in 2016. Different states in India embraced the law. According to it, all real estate projects in India must be registered under the RERA Act.

The regulatory board actively started verifying the project details. Thus, the risks of fraud and scams were reduced. Previously, investors’ money often got stuck in many real estate projects as there was no option to certify everything before investing. RERA solves this problem. With the project’s RERA no., you can now learn all the essential details before investing in it.

How Rera Makes A Real Investment Safe:

Real estate in India is safer now with RERA’s intervention. Let’s know how it helps to maintain investors’ reliability.

Mandatory Escrow Account:

Previously, builders used to roll investors’ money into other projects. It created many chaoses, including project delays. Now, RERA has made it compulsory for builders to deposit at least 70% of investors’ money received.

Option to verify builder’s credibility:

You can now know which builder complies with the RERA Act. Thus, you can decide who is credible to be relied upon. Make sure to trust a builder who has a good track record. Also, they must have a certain financial stability.

Restriction on building modification:

Without buyers’ consent, builders cannot change building or layout plans, specifications, or project liabilities. Builders need at least 2/3rd of the buyers’ consent for a specific project. Also, if there any structural issue occurs within 5 years of possession, the builder must address it.

No more than 10% of the booking amount:

Builders cannot ask for more than a 10% down payment of the total property cost during booking. They can ask for the rest of the amount during construction or post-handover. Any builder who breaches this norm may have to go for imprisonment up to 3 years.

Strong redressal mechanism:

Above all, an investor can file a complaint if the builder. RERA is liable to resolve it within a period of 60 days from the complaint date. 

As per the RERA act, it won’t allow soft launches or pre-launches anymore. A builder cannot sell anything that does not exist. Overall, RERA has made real estate in India more investor-friendly.

Wrapping it Up:

Looking at the present growth in real estate in India, experts predict that investing here can bring you a high return. Also, RERA has made the investment process easier and safer.

Anyways, there are still frauds in the market. Moreover, not all properties to invest in real estate in India are for everybody. Hence, you must take professional advice from reliable property consultants in India. They can guide you with their knowledge and experience.

Title - How Safe Is It To Invest In Real Estate In India

Meta Description: If you want to invest in real estate in India but are concerned about the safety of the investment. This blog helps you dispel your concerns.

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