Now that we have a new government, their initiatives to make India one of the top investing countries seem to be getting paid rather quickly. As per the latest that we have heard the American real Estate tycoon Mr. Donald Trump is eyeing and planning for investment in Indian hotel and real estate sector.

What’s the investment all about?

The promises given by Mr. Modi led government to enhance the infrastructure and boost economic growth of the country seems to have impressed Mr.Trump and he is looking for significant investment in the country. Mr. Trump was in India to launch his Trump tower in the financial capital of country- Mumbai.

So what made Trump to change his mind?

This investment has been probably due to the business and friendly minded leader of the country. He stated that if he was asked about investment in India couple of years back, it would have been a completely different situation.

Indian real estate market has been seeing a huge setback due to the high inflation rate and interest rates, there has been considerable decline in the home sale and huge loss has been incurring losses due to this. Post the change of the government in India, there has been nearly 5% increase in the home sales across metropolitan cities, which is comparatively 11% higher than the growth seen during the previous government rule 2 years back. Looking at the current home sale Real estate investment trust has been started to boost the foreign investment in the real estate sector.

In addition to the investment in the Indian real estate sector, Mr. Trump has been looking for investment in hotel and skyscraper in USA as well as has projects lined up for places like South Korea, Dubai and Turkey.

Trump Tower:

In order to win over the millionaires residing in India, the Trump tower will be a 75 storey and 800 Foot building.  As per the Lodha group, top luxury real estate developer, the aim behind the tower is to raise the level of luxury and services in India. It is aiming to create a new definition to the Skyline of Mumbai. This tower has been planned to include 3 to 4 BHK with indoor Jacuzzi and the price tag could be expected more than $80 million and more.

Mr. Trump has started the Trump tower in collaboration with the Lodha Group of India and has given hint of another probable investment in the city of Pune which is due for completion in 2015.This also might to be by entering licensing pact with another company.

In the previous years due to highly quoted prices, Mumbai real estate industry had to go through slow down in sales and responses. Several projects were left incomplete due to lack of environment clearance, disputed lands, incomplete approval from authorities, and very often builders were lacking financial support. With the win of Modi led BJP as the new central government, real estate industry expects revival with efficiency in approval process and easier and smoother bank funding.

Currently, the main factors affecting the growth of real estate market of Mumbai are:

• Improved policies of government for boosting the real estate sector.

• State government’s take on its policies related to New Development-Controlled Regulations, Redevelopment, Slum Rehabilitation Act (SRA) and Floor Space Index (FSI).

• Impact of infrastructure changes across the Mumbai Metropolitan Region for boosting the real estate industry.

• Role played by MMRDA and MHADA in the real estate housing sector.

• Reasonable and affordable housing policies.

• Other various factors important for market dynamics like holding capacity of developers, their strategy for sales, acquisition costs, peer pressure for competition, premium on a brand, amenities involved in the project etc.

What about the factors affecting the property prices? These are land cost, price of raw material, technology, labour and others. The existing stock of homes in the city has been constructed with high prices of land and raw materials. Thus, it would not be fair to expect immediate price corrections.

So what are the actual demands or expectation of Mumbai real estate industry? Let us elaborate it:

• A confident government with firm policies for making reality market strong.

• Quick and single window clearance system.

• Easy availability of raw materials at subsidize cost.

• Tax incentives and simpler taxation system.

If all these problems are resolved successfully, it will be a great help in controlling the skyrocket prices in real estate industry and the dream of Modi’s government of ‘a home for all’ in a city like Mumbai will not be a dream anymore.

So, are we seeing any positive changes since the new government? Well, just even before the elections the Housing Sentiment Index (HSI) reflected the signs of improvement in consumer sentiments in Mumbai. HIS is a sentiment index of the Indian real estate market that captures buyer ‘mood’ and acts as a sign of changes in real estate market performance.The HSI improved by 24 per cent as compared to a rise of 5 per cent in the last quarter. The HSI for Mumbai has moved even above 100 for the very first time in four quarters and today it has reached up to 106.
Though with this year we have seen progress in the overall economy, still lot of work needs to be done to revive the lost confidence in the real estate sector. Start of 2014 was quite positive for Mumbai real estate as it saw almost 20 to 30 percent of increase in the sales but later closer to elections transactions started coming to a standstill.

On its 75th Independence Day every Indian should have a house for their family by 2022 – A dream of Modi government for its countrymen. But how feasible it is for this new government  to meets its ambitious housing target? That time will only tell. To accomplish this dream government had already set initiatives of 20 millions and 45 millions houses for  urban and rural India respectively  in place even before it took charge.

As per the housing experts,  it is indeed  possible to make “Mission Housing” a reality but the Government needs to do proper planning such as setting the housing policy framework in a correct manner for active participation from private, public, community and individual sectors, removing all the road hurdles in between, providing fiscal incentives and support mechanisms. State government should also equally take interest and be on the same page as central government.

Not only that, we also need good access to all the resources required for turning this mission into reality such as – building materials, land and technologies at reasonable costs, user friendly finance and supportive infrastructure. That will ensures hassle free resources, well planned time framework and brings everybody From consumers, to builder, to urban development agencies and the Central and State policy makers and infrastructure supporting agencies to work together as partners for achieving a common goal.

You must be thinking why is housing a right place to start the economic reconstruction? Well, the answer lies here –

• It is being estimated that with this Housing and Infrastructure planning at all-India level (urban and rural), GDP contribution  will jump up straight from 7 to 12 per cent.

• Several manufacturing and production units including more than 250 industries will start functioning and hence, will start contributing to employment generation for millions of people.

Let take a look at highlights of the action plan by the government in order to fulfil the dream of “Housing for All”:

• Resource inputs: Land as a resource, especially in urban areas for social, efficient and optimum use of land. To cope with the doubling of the urban population the urban land footprint also needs to grow from the current 4 per cent to 7-8 per cent and use land in an efficient and optimum manner by creating land assembly with infrastructure.

• Fast track approvals: Building rules and regulation for governing housing and bring it to the level of  the NBC with incremental housing.

• To create affordable housing,  building construction cost should be brought down which is otherwise growing at the rate of 50 percent more than  the inflation.

• Affordable housing finance.

• Improvement in Basic Infrastructure e.g. water supply, 100 per cent sanitation with proper disposal system, potable water for all, energy and connectivity of roads.

• Improvement in social infrastructure such as health, education, recreation and culture.

• Building materials and technologies.