Introduction
Indian real estate is witnessing a boom and the scenario keeps evolving with every passing day. Indian real estate is heating up big time no doubt. It is estimated that Indian real estate is presently growing at 30 % per annum and the property industry boasts of a wide range of products that includes property prices which would suit even the people of the low-income group. Indian real estate industry is expected to grow beyond $100 billion in the near future.
A key point to note is that the Indian real estate is mostly privately owned, and is a highly unregulated, unorganized market with huge potential.
Indian Real Estate is certainly zooming away in the wake of current scenario witnessing its being riding on high growth wave. Indian real estate is happening, and a number of non-real estate companies are entering the sector to leverage the opportunities. Indian real estate is a growing sector for both investors and people who are looking for a home. Indian real estate is making rapid strides oIn the back of country’s surging economy.
After a slow start, FDI in Indian real estate is poised for rapid investments of over USD 10 billion likely in the coming near future. The attraction of Indian real estate is now in no doubt after an international investor pledged to put millions of pounds into the Indian real estate sector. From consultants to financiers to developers and construction companies, Indian real estate is witnessing a sea change in terms of operations.
For Non-Resident Indians (NRIs) and Persons of Indian Origin (PIO), investment in Indian real estate is monetarily rewarding and emotionally gratifying, as it helps maintain bonds with their homeland.
Indian Real Estate Investments
Policy changes introduced by the Government in February 2005 allowed 100 per cent foreign investments in construction projects with fast-track approvals. But the real attraction for foreign investors is potential investment returns of 25 per cent and more in Indian projects that might be hard to come by in the US and in Western Europe today.
Kishore Gotety, ICICI Venture Funds’ director of investments, says the internal rate of return net of developer margins and fees could be between 25% and 28%. Vornado’s investments through this partnership are primarily in the booming market for information technology parks in cities like Bangalore, Hyderabad and Navi Mumbai.
Vornado’s president Michael Fascitelli declines to detail the company’s investments in India, but says that it plans to create a fund that will co-invest with its Indian partner. ” He adds that while his company has targeted China and India as the top destinations among emerging markets for real estate investments, India scores higher marks. “Vornado’s Fascitelli says he expects high returns from investments in India “because of the risks.
Various authors have published tables showing 30 to 100 percent gains in a year through real estate investments. What the Indian Real Estate investor needs to be doing is deliberately evaluating if he is making the right investments, not by getting carried away by glossy advertisements but getting relevant provisions endorsed in the buyers agreement.
If you intend to add real estate investment in your overall investment portfolio or looking for the most productive commercial property, residential property or any other form of investment property, now is indeed a great time.
We intend to showcase the developing India which is open to investments and offers world class environment for work, luxury, relocation and retirement. This has been one of the most crucial factors for India gaining its status as a highly favored investment destination through FDI and funds. Property investment doors open for NRIs The policies set out by the government regarding property investment and repatriation, has made opportunities of investments in India even more favorable.
Approximately 94% of the capital investment being made in property is in Mumbai, Delhi and Bangalore. From Singapore, Lee Kim Tah Holdings is putting down its investment of US$115 million in a 100-acre township, with commercial and social infrastructure adjoining, near Mumbai. Nevertheless, the high profile investments which have arrived would have been unheard of as little at 10 years ago.
Real estate experts believe the country will need an investment in the order of US$75 billion to US$90 billion to bridge the expected deficit in housing, with only about 25% of that total being expected from banks and other institutes, as well as central and state governments.
Real Estate Growth in India
Real estate maturity in India focuses on three primary areas: commercial, retail and residential. Commercial Real estate refers to Office space; IT, BPO, KPO space leasing continues to boom with 12 million sft leasing across India; with 6 million square feet in Bangalore, and 7 million square feet Mumbai.
Growth in commercial office space requirement is led by the burgeoning outsourcing and information technology (IT) industry. One is a $200-million project for residential and commercial development on 42 acres in Bangalore’s prime Whitefield suburb. Industry experts believe that Indian real estate has huge demand potential in almost every sector — especially commercial, residential and retail.
As an indication of global interest in Indian real estate, LaSalle Partners, a major commercial real estate firm with headquarters in Chicago, last month announced the opening of an office in New Delhi, India. In India, banks had never thought of funding a commercial or residential real estate property a decade or two ago.
Some relevant regulations
Acquisition by way of gift: An NRI or a PIO may acquire residential/commercial property by way of gift from a resident of India, an NRI or a PIO. However, a foreign national of non-Indian origin resident outside India cannot acquire residential/commercial property in India by way of gift.
Sale of immovable property: An NRI can sell residential/commercial property in India to a person resident in India, an NRI or a PIO. However, a PIO can sell residential/commercial property in India only to a resident of India.
Furthermore, the commercial real estate sector promises better results with the demand for office space in the top seven cities shooting up to 70million per square foot, within the next three years. Another factor pushing the average rentals in the commercial business district (CBD) areas is a sharp increase in value of rupee. The demand for commercial property is steadily on the rise, especially in the retail sector.
Conclusion
The Real Estate explosion in the Indian real estate is in large part due to the by the burgeoning outsourcing and IT and BPO industries, which are bringing large amounts of cash. The underlying reason for all these moves is that the Indian real estate is tremendously attractive, because of basic demographics and a supply shortage. Truly Indian real estate is having a dream run for last five years.
Though there is a sort of saturation in the Tier 1 cities but the good news for Indian real estate is that Tier II cities started growing with the IT Sector and the industrial sector investing in such places. Thus Indian real estate is poised for a boom, taking the rest of the economy with it.
The notion that Indian real estate is expensive is based more on the cost of undeveloped land, which is becoming a scarce commodity, than finished residential or office space, which is still available at reasonable prices in most places, except maybe places like Marine Drive in Mumbai or Connaught Place in Delhi. Indian Real Estate will remain bullish for the foreseeable future.
Please Note: we will update this article from time to time with newer facts. If you want to share any facts related to India real Estate, you are welcome to contact us through the Contact page. Thanks.
Indian economy is in good shape. Its GDP has shown sound growth over the last ten years. Increase in per capita income is leaving more disposable incomes in the hands of individuals.More disposable incomes means more demand for goods, and more demand for goods and services, translates into good prospects for other industries. This in turn increases disposable incomes in the hands of others also. Substantial amount of these disposable incomes is finding its way into real estate, primarily housing sector.Land prices in the second tier cities are still affordable, and large areas can be acquired, as these regions are not bound by sea. It is also possible to redo them economically.Higher cost of living in first tier cities also results in an additional burden of dearness allowance. Amenities in second tier cities are soon catching up. Therefore, these cities offer better potential for real estate appreciation now.Investment scenario has certainly undergone a paradigm shift in India. Gone are the days when potential investors used to sought after investment options like equity bonds and park money in shares where your return ranges between 5.55 to 6%. Data showcased by property surveys show that returns from rental incomes on investment in commercial property in Indian metros, is around 10.5%, the highest in the world.# Selling and buying Indian property is now considered as the most profitable and attractive business opportunity in the present real estate scenario in India. New demands have added to strength of real estate markets across the commercial, residential and retail sectors in India. Not surprisingly, demand for Indian property has been increasing steadily for the past few years and it has exceeded supply.Lower interest rates, easy availability of housing finance, burgeoning income and better job prospects, increase of nuclear families have given a boost to the demand for residential properties in India.In the present day scenario, if there is any powerful investment tool that brings burgeoning financial returns, it is INDIAN REAL ESTATE!!! Investors should consider the parameters minutely and meticulously to find out why investing in Indian real estate now is the best viable option.to get more insight of the latest happenings and trends in the Indian real estate sector one can view my blog-www.realtydigest.blogspot.com
I expected your web site to provide me with the current status of real-estate sector in India. Instead I get almost six months old picture. Please update. may I suggest to put the date of posting right at the top so that we know which articles to look for. Thank you. Ashok Shah, New Jersey, USA.
Hello Ashok, thanks for your message.
We try to keep the site updated and also answer questions by people, for free. Since we run our own real estate investments, time is a constraint sometimes.
Please see the latest post for more info:
http://india-real-estate.org/indian-real-estate-industry-overview-mid-2009/
Hi there, I expected some current trends on the real estate industry as I am looking for some important facts and figures. Kindly update me with the required info on the above mentioned e-mail id with the figures under real estate as on date.
It is true that Real Estate explosion in the Indian real estate is in large part due to the by the growing outsourcing and IT and BPO industries, which are bringing vast amounts of cash. People, who are looking for the property in India, can visit this site to get the information about the carious builders, their projects location details and payment plans details. People can also contact at 0120-4338222 for any query or immediate information.