The Housing Ministry’s plan to liberalise FDI rules for bulk buying of ready inventory will help stressed realty to recover.
The Housing & Urban Affairs Minister, Hardeep Puri had recently made announcement to this effect . This announcement assumes significance as it comes in the wake of Corona crisis severely hitting FDI in real estate. Post Covid, there has been 62% drop in FDI in real estate at Rs 5.6 billion during Q4, FY 20 . Currently under the law, FDI is allowed in under construction projects but not in ready residential realty with OC.
Says Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global, and Chairman, ASSOCHAM- National Council on Real Estate, Housing and Urban Development, “There is a lot of ready residential inventory lying unsold with developers. There are two obvious advantages for buyers of ready inventory. There is no development risk and there’s is no GST levied on it. Further, in bulk buying of ready inventory, foreign investors may well get good deals from financially stressed developers. And this will help significantly cut high unsold inventory, improving developers cash flows and reviving realty.