real estate in India, real estate investment, distressed property, property for sale, affordable home, residential sales
Distressed asset purchases should be done as an informed decision, which should be aligned with the investor’s risk appetite.

The multiple policy reforms and structural changes initiated by the government were aimed towards getting the much-needed transparency into the opaque and highly unorganized real estate sector. However, there has been stress of cash flows among market makers. With pressure on sales and the Real Estate Act coming into shape, developers are struggling to re-align their business models as per the new norms. The practice of residential projects being self-funded with interest-free money coming in from the initial pre-launch phase is now a thing of the past. Developers need a huge amount of capital to be infused into each project, thus putting tremendous pressure on the balance sheet. Interest rates have already started to harden, and the banking sector is still wary of funding real estate developers. On the investor front, a number of them depended heavily on cash components for exiting their resale investments and are now left awry post the drive of demonetization.

All these market movements have brought to light a whole new segment for investment – distressed assets. Given the current market conditions, property buyers are showcased with a range of opportunities across retail and office assets, single residential units, and even entire projects at attractive valuations. Smart property buyers can make the most of this opportunity. However, it is extremely important to be cautious before…