New Delhi property – top tips

Tip one

Buoyed by robust returns from equities and real estate investments, high foreign inflows and a booming economy, India is now the world’s second -fastest producer of millionaires, marginally behind Singapore.

Tip two

FDI is permitted in only green fields projects, and it is mandatory to complete at least 50 per cent of the project within a five year period from the date of obtaining all statutory clearances. Land ‘flipping’ is not possible under the latest FDI policy and investors cannot sell undeveloped projects.

Tip three

A high profile gated community project released in 2007 fell so short of buyers’ expectations that they took protest action by occupying the development’s empty swimming pool. This was not a once off so overseas buyers should be extremely cautious in checking the credentials of both the developer and its local partners.

Tip four

Despite India being in its early stage of real estate evolution, luxury residential prices have already reached levels well exceeding those in more established markets such as Thailand.

Tip five

New Delhi recently won a place on the list of the best places to invest in real estate in the Asia Pacific region in 2009 compiled by Urban Land Institute (ULI) and PricewaterhouseCoopers LLP. The ‘Emerging Trends in Real Estate Asia Pacific 2009′ report placed the city in the top 10 for the first time and some hoped it would become one of a select number of locations international investors put their money until the financial storm abates.

Tip six

Tighter credit and construction oversupply, especially at the high end of the market, have combined with a slowing economy and the global crisis to hit the confidence of both domestic homebuyers and overseas investors.

Tip seven

The Indian government has fought back against faltering interest in the city and recently announced a five-year income tax holiday for new hotels and convention centres which start operations in and around Delhi up to March 2010.

Tip eight

The fact that New Delhi acts more as a business destination than a location for holidaying for overseas investors means condominiums are by far the most popular option with this category of buyer.

Tip nine

India’s property investment laws can be quite restrictive and many foreign nationals buy on short leases and then apply for residency. However, a new visa limiting stays to 180 days may soon be introduced which would effectively end the practice.

Tip ten

At present investors can buy through an Indian company structure but the loophole could also soon be closed by the Indian government.

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