Buying property in India
The market of property in India only started to develop in the last decades. Great deals can be made either for residential or for commercial properties. However, buying property in India requires a well planned and guided approach as it contains both opportunities and pitfalls.
With a huge middle class emerging, India’s demand for more luxurious housing at comparatively low cost has significantly increased. Huge efforts were made by the Indian government to make the purchase and sale of property in India less complicated, which has further fuelled the development of the Indian property market. However, the transfer of property still involves lots of red tape – especially for foreigners.
Popular regions in India
The sheer size of India with its natural diversity, ranging from remote mountainous regions in the north to the long coast line of the Indian Ocean provides residential space to everybody’s liking. Costal areas in particular are less densely populated and many expatriates open small businesses here, such as bars, hostels and restaurants.
The most popular regions to buy residential property in India are Goa, Kerala and Karnataka. Special government programs discouraging high-rise building promise high quality of living with residential homes perfectly fit into the natural beauty of these regions. Most properties for sale are new-build, as older properties are usually handed on within families for generations.
If you are looking for apartments or office complexes, you will easily find good offers in major cities, such as Hyderabad, Bangalore and Mumbai.
In New Delhi, property markets have slowed down significantly since other regions are becoming more important and prices in New Delhi have risen to match Western levels.
Another negative aspect of investing in New Delhi is the local rent regulation. Landlords can only charge rents up to ten per cent of the value of the land and the construction cost of the property. This calculation is based on historic prices and it ignores current market values. Since rental profits are higher in other Indian cities, many real estate companies rather invest there.
Property prices in India
Property prices in India are highly dependent on the region and the type of the property. You can buy two storey houses at the east coast of India for as little as US$35.000 but would have to pay US$120.000 or more for the same house in Goa. Prices for one-bedroom apartments revolve around US$40.000 in New Delhi and are – still – less in other big cities in India.
Since legal complications make property purchases for foreigners a very time-consuming process you should only consider investing in India if you plan to stay there for a long time.
Finding property in India
Many homes for sale in India can be found online. Almost all estate agencies offer their services on the web. Developers also offer properties online, avoiding the middle man agencies.
Since buying property in India is very complicated for foreigners, there are thousands of Indian real estate agencies offering their services. Be extremely careful when choosing an agency as many of them will try to circumvent legal obligations in order to save money. Taking time to find the right property is important but you should also take much time to find an accredited and trustworthy agency.
The costs for using an agency in India usually amount to seven to ten per cent of the property price.