The Indian Real Estate Market is a sitting cash cow for foreign investments. Those in the know are aware that Indian real estate has been booming for the past few years now. However the stakes are getting higher with the cash laden Middle East (Emirates) keen to invest billions in
India’s realty market through various joint ventures with local companies as well as investment groups. For example, Tanmiyat realty group of Saudi Arabia, is planning on making an investment of as much as $3billion in India in as township project. (The Economic Times)

Then there is the US of course with Trump planning to make entry into the Indian realty market. Over the next couple of months, big metros such as Mumbai and New Delhi will soon be able to witness the high-rise buildings of Manhattan right here on Indian soil! Donald Trump Jr, believes that Indian Real Estate has tremendous potential and property rates are not so high as compared to the rest of the world. “We are looking for JV partners to enter into India. That is precisely why I am here. We are interested in the major cities for investment,” Trump Organisation’s Executive Vice- President (Development and Acquisition) Donald Trump Jr had told reporters in Mumbai.

In fact, in early November, Merrill Lynch & Co, took the leap and invested in several mid-income housing projects in
India. What’s more, many foreign investors also want to cash in, in the growing stock market. With so many foreign investors watching and eying the Indian market, the securities and exchange board of India (SEBI) has beefed up on the investment rules, more so for unregistered foreigners.

What will foreign investment in real estate mean to the local market? Is it good news? There are opportunities for profit, which will breed further development. Of course it depends on your point of view. Whatever the reaction, there’s no stopping large foreign investment.

The great HIP debate is raging all around us, but until now, off plan property has been somewhat overlooked. This is set to change following this month’s announcement that new rules apply from April 2008. So if you’re not sure where you sit on the HIP question - read on.

The misconceptions surrounding the relevance of HIPs for off plan and new build properties have been festering for months. Until now, many new build properties have remained exempt from HIPs under regulation 17C; although new builds commissioned before this came into play already require a HIP. The main reason behind the time lag is the fact that it was not possible to produce Energy Performance Certificates (EPCs) for off plan properties, as the assessment involves a physical inspection. This changes in April when software becomes available for assessors to conduct Predicted Energy Certificates (PECs) instead. Then all marketed properties – including those purchased off plan - will need HIPs.

Interestingly, the HIP will be the responsibility of the marketer of the property whether the developer or an agent. And don’t be caught out by the fact that although a full HIP is not required for properties sold between developers, those being sold on for residential purposes will need one, whether the buyer intends to live in it or not.

Good news for off plan
The effect of HIPs on the property market has been much discussed since their phased launch began. Reports show a huge decrease in three bedroom houses put on the market since the HIP arrived – some claiming up to 73%. The media suggests that vendors are being put off by HIPs, firstly because they cost valuable pennies and secondly due to worries over underlying problems the HIP might uncover - a concern which is largely irrelevant for brand new builds.

According to RICS, 20% of properties put on the market annually are simply curious homeowners with no intention of selling anyway. So with fewer vendors testing the water – and muddying the market - there is less competition for buyers, which bodes well for an increase in off plan profile and sales.

The explosive media attention on HIPs over the last few months has hinted at universal disaster for anyone in the property market. We think differently. HIPs are a great marketing tool for new builds: their superior energy efficiency versus older properties becomes far more obvious for example. HIPs could just provide off plan properties with an additional boost, by highlighting the benefits of new and off plan for the many buyers still moving up the property ladder.