What are the biggest risks of investing in India’s residential real estate?

Despite its long-term potential, residential real estate in India presents several risks that investors should evaluate:

• Regulatory Delays: While RERA helps, some states have slower approval processes. Delays in construction permits and land acquisition can push project timelines and capital outlays.
• Market Fluctuations: Property values can stagnate or dip during economic slowdowns or global crises. Liquidity concerns may arise if demand weakens.
• Developer Credibility: Choosing unknown or financially weak builders raises the risk of project cancellations or construction halts. Verify track records and RERA compliance.
• Infrastructure Bottlenecks: Areas lacking roads, public transport, or essential services may see slow capital appreciation. Infrastructure promises must be thoroughly verified.
• Rental Voids: Investors relying on rental income could face vacancy periods, especially if the property is poorly located or lacks competitive amenities.

Mitigation involves research, verifying the developer’s financial health, focusing on RERA-compliant projects, diversifying across stable localities, and maintaining a medium- to long-term horizon for consistent returns.