India Real Estate Market - Contribute About $30 Billion in Upcoming Years

India real estate is one of the fastest growing sectors in the country and touching new heights. However, this rapid growth is dependent on the government policies to facilitate investments in terms of foreign direct investment (FDI) in India Properties and a booming economy.

According to a government official report of March 2007, “India has attracted $3 billion worth of real estate. This roaring India real estate market is now further expected to contribute for about $30 billion in the upcoming years. When compared to last year, real estate 2007 has gone doubled.

The boom in the real estate sector is leveraged to different parts of the country like Mumbai, Delhi, Kolkata, Chennai, Hyderabad and Chennai in all areas such as residential, retail, healthcare and commercial developments. In reality, the sector is growing intensely due to strong interest from the foreign investors and NRI’s that has pushed the Indian real estate cost beyond its actual limit. For example, Morgan Stanley has invested about $152 million in Mumbai real estate, stating to be the biggest investment in India’s real estate sector.

Market Growth

India’s real estate sector is witnessing a growing rate of 30% annually over the next decade, estimated to be US$ 15 billion and attracting foreign investments worth US$ 30 billion. The residential housing development contributes to 80% of the real estate in India and the remaining 20% is for commercial property development including offices, shopping malls, hotels, hospitals, multiplexes, entertainment centers.

The IT and ITES sector has contributed significantly to the growth of <a onClick="javascript:pageTracker._trackPageview('/outgoing/article_exit_link');" href="http://www.investinnest.com">real estate India</a> and it’s estimated to acquire 150 million sq feet of office space across India by 2010. Due to these massive requirements, the share of commercial sector in India’s real estate growth is increasing at a rapid pace.

Market Trend

India is a growing economy and has witnessed a growth of 8.1% in the last financial year. Therefore, the investors are eying on Indian property and willing to invest at this right time to reap huge profits due to the following reasons:

· Rising income levels of a growing middle class

· Growth in commercial office space requirement is led by the burgeoning outsourcing and information technology (IT) industry and organized retail

· There is a great demand for office and industrial space of 100 million square feet to accommodate an estimated 2 million new graduated passing out from various Indian universities recently.

· There is a huge demand for corporate space of a large number of Fortune 500 and other multinational companies who are willing to set up offices in India

· India is witnessing growth in other sectors like auto ancillary, chemical, healthcare, pharmaceutical, jewellery that lead to huge demand in this space as well.

Challenges

A latest Ernst & Young survey, named Realty Pulse has summarized the following challenges in the booming real estate sector in India:

· Availability of quality manpower

· Rise of manpower and material costs

· Plan approval and clearances delay are considered to be one of the biggest regulatory challenge

· The need for an apex regulatory authority/council to facilitate the process in a very transparent manner

Real estate players

The leading real estate players in India:

· Golden Gate Properties

· Puravankara

· Sobha developers

· EMAAR MGF

· ELD Spire Greens

· Mantri

· Hiranandani

· DLF etc.

Future road map

With a flourishing economy, there will be more demand across all segments of the real estate and like to grow at a phenomenal rate. Thus, the Indian real estate industry is likely to grow from US$ 12 billion in 2005 to US$ 90 billion in by 2015. This industry is likely to see tandem growth both in residential housing and commercial property development sue to huge inflow of FDI into this sector that will become a six fold jump to US$30 billion over the next 10 years.