The $12 billion real estate
market in India is on a high growth curve, on the back of a booming economy,
increased participation of global players in the Indian market, new
technological innovations coming to India, new norms and policies with respect
to maintenance of buildings, the general upgradation of infrastructure, entry of
some world-class players in the hospitality and entertainment sector, favorable
demographics and liberalised FDI regime.
The real estate sector is the
second largest employer in India. This sector is projected to grow to $50
billion by 2010 at an average rate of 20% per annum. Investment opportunity is
expected over $50 billion in the next five years
"In India's fast-growing
economy, real estate has emerged as one of the most appealing investment areas
for domestic as well as foreign investors. The real estate sector will continue
to derive its growth from the booming IT sector, since an estimated 70 per cent
of the new construction is for the IT sector," a report by
Pricewaterhouse Coopers has said.
"Favourable interest rates,
modern attitudes to home ownership (the average age of a new homeowner is now 32
years compared with 45 years a decade ago), economic prosperity along with a
change of attitude amongst the young working population from that of `save and
buy' to `buy and repay' and liberalised FDI regime have all contributed to this
boom," it said.
While the last decade saw the
transition of sleepy towns like Gurgaon, Noida and Faridabad into enviable
addresses, today these tier I towns, as they are called, are saturated and far
beyond the means of the middle class. Naturally, the opportunity in the
residential development in Tier-II and Tier-III cities--like Hyderabad, Cochin,
Chennai, Coimbatore, Gurgaon and Pune is equally enormous.
The real estate industry has a
lot of potential as various foreign Real Estate and Finance companies have
entered the Indian market. Moreover 100% FDI is allowed in real estate
development and the Indian government has played a major role in supporting the
growth of the real estate sector by allowing NRI investment in real estate.
Mall space is expected to
increase dramatically in the coming year, according to a recent report by
Merrill Lynch. Property development is no longer merely constructing a building
and leasing it out. The tenants of today are well versed with professionally
managed buildings. This has made the developers in India appreciate the need to
maintain and manage their property in a systematic manner.
Overall, the year ahead promises
to be a good one for all those involved in the industry- the builders, as well
as the consumers. The future of India is set to usher in the gold rush
of realty.
