With the current exchange rate of the rupee, India represents some of the best value buying in the world today according to Alexander Moore CEO, LJ Hooker India. “The only catch is that you must be either an Indian passport holder (including non-resident Indians (NRI’s) or a Person of Indian Origin (PIO).”
Mr Moore who has been expanding the Indian footprint of one of the largest real estate franchise groups in Australasia, LJ Hooker says, “In the last 12 months the effective cost of real estate in India has halved, but the growth story and local demand that drives this growth continues unabated. The current hotspots for purchasing property include Bangalore, Hyderabad and Pune (all driven by the IT boom) as well as holiday destinations such as Goa.”
Buying a home is a big investment decision and requires a substantial capital outlay, so it’s best if you are aware of what to look out for to ensure you mitigate risk in the buying process.
Amit Goenka, National Director at Knight Frank India outlines parameters of what to look out for when buying a home in India. There are a few common check boxes irrespective of location, which come first:
Conversion/Approval: Check that the conversion/approval of land for residential development is available.
Plans: Approved construction plans are available and they match with the design being promised. Such approved plans must be displayed on the project site at all times.
Permits: The list of essential permissions and approvals required for the project is known (importantly urban/town planning, municipal corporation, environment and forests, airports etc). Find out which of these are obtained and which are pending.
Land: The developer has authority/power of attorney to transfer the undivided share of land to each flat owner and the entire plot to the society and/or the project on completion.
Ownership: The landowner/promoter/developer has no right on open spaces such as terraces to provide unrestricted ownership and enjoyment of property by flat buyers.
Access: The building has clear and approved road access, right of easement and established pathways.
When looking to purchase an apartment in a new development project it is important to check the following in addition to the above:
1. The flat has been constructed as per the approved plan.
2. Completion certificate has been obtained for completed buildings.
3. Utilities are available and connected for each flat.
There are regional variances to consider Mr Goenka states, “When buying real estate in Mumbai investors have to consider and investigate more than those buying in other areas.” These factors briefly include but are not limited to: Intimation of Disapproval (IOD), Commencement Certificate (CC) for construction of buildings; Land Rights; Zone and Use, Development Regulations (DCR); Calculation of Area; Total cost of ownership including Tax, Stamp Duty, Registration and Brokerage; Maintenance; List of promised features; Infrastructure; Safety and Sustainability Features and Parking.
As suggested by Amit Goenka, “quite often securing such detailed information, verifying and deciphering it can be quite complicated, hence once preliminary due diligence is conducted by the buyer it becomes important to engage a good property lawyer to verify the documentation.”
Rightmove Overseas Indian Property partner PropertyFeast.com provides listings from leading & trusted property groups such as Knight Frank, LJ Hooker, Colliers International, Jones Lange LaSalle, RE/MAX, Ray White, Hanu Reddy, Coldwell Banker, NAI’s NK Realtors and Hemdev’s among others.