Real Estate Development In India
Indian economy is growing at an exponential rate
for the past few years and is projected to be expanding steadily in future. The
rising gross domestic product (GDP) and per capita income has contributed to the
demand for various products and services, especially amongst the strengthening
middle class. This has also led to an increasing number of first time home
buyers, which has subsequently spiked up the development of the real estate in
India. India's economic reforms were also responsible for expansion of the real
estate sector and for opening the door for foreign investors.
Real estate has become the biggest contributor to
India's GDP as well as brings in the fourth largest inflow of the foreign direct
investment (FDI). Indian real estate is expected to reach upto US$ 180 billion
by 2020, and the demand for the property is forecasted to grow at a compound
annual growth rate (CAGR) of 19% till 2014. It is not just the rising demand for
residential property, but India is also a haven for any commercial real estate
company. There are growing requirements for infrastructure such as education,
healthcare and tourism, and also a high demand for office and industrial space
driven by an ever increasing number of fresh graduates each year. Influx of more
Fortune 500 companies into the Indian territory is also fueling the demand for
corporate space in India. It is also projected in a report by McKinsey Global
Institute (MGI) that India needs to invest US$ 1.2 trillion over next 20 years
to keep pace with its growing urbanization.
2012 witnessed a number of initiatives by the Indian Government to boost the real estate sector, and industry specialists project the current year to be even more positive than ever for India's real estate sector. FDI inflow of US$ 4-5 billion is expected in next couple of years with focus on property development in New Delhi, Mumbai and Bangalore. Real estate is already the second largest employment generator in India after agriculture and it is expected to grow at the rate of 30% over the next decade. To retain this boost in development and operations of the real estate developers, India's Government has allowed FDI upto 100% for growth of townships, housing, built-up infrastructure, construction development projects to increase investment, and create new employment opportunities. Moreover, the Reserve Bank of India (RBI) has also allowed foreign citizens of India origin to purchase real estate in India for residential or commercial intentions. Union Budget of 2012-13 also focused on accelerating the investment in infrastructural facilities and taken initiatives to attract private investment through Public-Private Partnership (PPP) route. With all these reforms and initiatives India's real estate boom is likely to grow for many years to come.
The author has great interest in real estate sector and loves to share his knowledge about real estate industry with others. Here, he is talking about Hospitality Industry Management and Commercial Real Estate Companies