Want To Make Big Gains In Property? India Is Asia's Best Performer

The optimists who did not let reports that harped on the negatives of India's real estate dampen their spirits did not base their faith solely on their instincts. Their firm belief in India's real estate and its great potential has been based on facts and figures, it would appear. Local reports may be lampooning the way matters are shaping up after new reformatory legislations, including the Real Estate (Regulation & Development) Act, 2016, and the Goods and Services Tax, came into force in the recent past, hitting sectorial growth further in the belly. As it is, property markets in India did not see much action in the past four years.

Wide cracks started to show after the country put in place a regulator to monitor the sector, notorious for its, what is often referred to as, “shady character”. However, the performance of India's real estate is nothing short of stellar when we compared it with other economies in Asia, all the unhappy developments at home notwithstanding.

According to a recent report by a global real estate advisor, top returns from real estate in Asia for over five years came from India. Investing in India's residential market returned 70 per cent in the five years through June, compared with 65 per cent for Hong Kong, the world's costliest housing market. In comparison, investments in neighbouring China yielded only 20 per cent returns in the same period. On the contrary, those who invested their money in Japan and Singapore registered a decline in their profits.

Meanwhile in the world market…

Authorities in China have imposed a slew of restrictions to cool off the demand to rein in appreciating property prices. As far as the demand is concerned, their efforts are now seen yielding results. Home sales in China grew at their slowest pace in three years in August, data show. However, the value of new homes sold rose 3.8 per cent to $123 billion in August from a year earlier, data by the National Bureau of Statistics show.

Declining oil prices are seen impacting the residential real estate in Dubai. According to Phidar Advisory, the city will have more vacant housing units in the times to come and job losses hit harder. Landlords, too, will find it hard to get tenants. As it is, sales volumes of ready-to-move-in properties are at a six-year low. Prices of villas in Dubai fell 10.2 per cent on average in the past 12 months, while apartment values remained unchanged. Rents of similar units declined 4.9 per cent while apartment leases fell 3.4 per cent in the period. The prolonged downturn has those beaten those owners and landlord into submission who have been unwilling to reduce prices expecting a rebound this year.

In August, property prices witnessed a modest recovery in the UK. However, capital London was a different story.  According to the Royal Institution of Chartered Surveyors, London property brokers and their sentiments are as depressed now as they were in 2008. According to the survey, home sales have not seen any growth since November last year. Average stock levels lying with brokers are near an all-time low, too.

Prices of property in Toronto, the biggest city in Canada, are also falling. And, so are the sales. The average price for all housing types declined 1.9 per cent in August from July to $591,225, according to the Toronto Real Estate Board. When compared to the peak seen in March, this is a fall of 20 per cent. Homes sales in the month declined 35 per cent when compared to the same month last year. New listings, on the other hand, fell to their lowest level in August in seven years.