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
A report by Price Water House 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.