India has witnessed an emerging middle class in recent years due to the country's economic boom.

The Indian economy is growing at a rate of 8% per year.

Property laws are underway to improve the market.

India is attracting international property players.

« Prev Next »

1

4

E-mail Article

Printer Friendly

Share Article

A 'real' giant

In recent years there has also been an emergence of new prosperous strata.

The middle classes in India are now estimated to be 120 million people, half of which are under 25 years old and well-educated.
This figure is set to rise according to India's National Council of Applied Economic Research which anticipates another 180 million people will join the middle class population by 2010. At 300 million this will be considerably larger than in the US.

All of this is having a positive effect on the real estate market with real estate investments, currently estimated at around US$12bn. It is estimated that between 14 to15% of the national GDP is attributed to the real estate sector.

The booming economy, the increase in disposable income and the emerging middle class are all having a positive effect on India's real estate.

"The Indian real estate market offers cross border investors with an attractive investment opportunity underpinned by a booming and increasingly diversified economy, significant potential for rapid expansion in FDI and a maturing real estate market," says Grover of Jones Lang LaSalle.

While the prosperous economics of the country have all had a significant effect on the real estate boom, one of the most significant factors for the boom was the government's decision to relax its Foreign Direct Investment (FDI) regulations in 2005.

New laws now permit foreign investors to purchase commercial development projects under construction with over 50,000 sq m or residential development plots with a minimum size of 10 hectares.

The decision has also cleared the path for foreign investment to meet the demand for the development of the commercial and residential real estate sectors. It has also encouraged several large-scale financial firms and private equity funds to launch exclusive funds targeting the Indian real estate sector.

"There has certainly been an increase in foreign investment [since the FDI regulations were relaxed]. There has been a lot of activity in terms of investors, foreign developers and funds looking at investment opportunities in India," agrees Grover.

No Comments