Realtors are actually worried on the raised project costs due to the new regulations imposed by the government as well as by the risks involved in the land and development issues.
The government, concerned over the murkiness of India’s property sector, is still thinking over regulations for real estate investment trusts.
Venture capital property funds are permitted but high minimum investment requirements effectively place these off-limits for retail investors. Despite developers’ protests, the government’s caution on Reits is understandable, says analysts.
Indian real estate companies are still plagued by risks, including issues as basic as the certainty of land title. Reits are meant to provide safe returns – not nasty surprises.