Why Real Estate Investment in India makes sense?

Indian real estate sector is one of the most globally popular sectors and is the second largest employer after agriculture. It is expected to grow 30% in the next decade. The Indian Real estate market size is expected to touch US$ 180 billion by 2020 in which housing sector will constitute 5 -6 % of GDP growth.

Why Real Estate Investment in India makes sense?

Population matters!

It’s tangible, it’s solid, and it’s beautiful. It’s artistic from my standpoint, and I just love real estate.

– Donald Trump

   Trump is accurate in describing the real estate attractiveness and with the global context, Indian Real Estate market is poised for big growth. According to Cushman & Wakefield, India was among the top three countries for increased investment in 2014. India is facing a 22.7 million units housing shortage and trying to cover the gap in seven years by 2022 is ambitious to say the least.

There are three recent developments that could put India on a sharp trajectory. The first is the landmark report by Reuters confirming the  passing of the Cabinet bill that relax the Foreign investment funds (REITs) in Real Estate sector. Already one of the leading builders, Nitesh Builders have recorded the investment by Goldman Sachs for multi million dollars.

The policy move and stern warning of Raghuram Rajan, Governor of Reserve Bank of India to the banking community to pass on the benefits of point cuts to the consumers. So the three major lending banks have dropped the interest rates on home loans that is going to boost the purchasing power of the investors.

Third is the interest shown by NRIs due to the strength of dollar and decline of rupee value in addition to the stabilization of house values to a reasonable level. Read the full story. Meanwhile HDFC published an article about the improved affordability of housing in India.

The top ten list of cities for investment growth is out and I will dissect them in my next article.

 

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