Real estate in India: A snapshot
For global investors, non-resident Indians (NRIs) and developers, real estate in India, hands down, still tops the list of the most favorite investment destinations in the world. Riding on the back of increasing globalization and investor-friendly government norms, Indian real estate has come a long way from just a thriving sector to the second biggest employment generating segment after agriculture in India.
Contributing to nearly about 6.3 percent to India’s GDP (Gross Domestic Product), real estate in India has really come of age. Furthermore, the FDI (foreign direct investment) in the industry is anticipated to touch the USD 25 billion mark in the next 10 years, as per real estate experts. Rapid urbanization, positive demographics, the rising trend of nuclear families, high-income growth, growing housing demand and infrastructure are some of the factors that have upped the value of real estate in India, aiding it to step forward.
Market and investment dynamics
Owing to the abundance of bank loans which are up for grabs, perked up living standards and growing income levels, real estate development in the country, which was once hemmed to bigger cities, has now shown a remarkable progress in small urban sprawls. As per real estate experts, the real estate sector of the country is likely to post annual revenues of USD 180 billion by 2020, much more against the USD 66.8 billion in 2010-11.
The construction sector in the country boasts of housing, townships and built-up infrastructure, which brought to pass FDI worth USD 22671.95 million in the April-August 2013 period. With Godrej properties (investment up to Rs 9000 crore) and Unitech Ltd (Rs 800 crore deal), the investment climate in the country is likely to boost the confidence of the members of the real estate community.
Steps taken/need to be taken
In a move to give an edge to the realty sector, the government allowed 100 percent FDI in the construction sector. Furthermore, the Department of Industrial Policy and Promotion is looking to looking to relax the FDI norms, in a bid to promote investment. In addition to it, the Real Estate Bill 2013, approved by the Union Cabinet, has emerged as a pioneer initiative by the government that takes pride in giving quick verdicts, delivering a uniform regulatory environment and guaranteeing a systematic growth of the industry.
As per the proponents of the real estate market, India must invest USD 12 trillion in the next 20 years, in an attempt to move up its urban infrastructure and maintain the pace with the burgeoning urbanization. Rising demand for space from various industries like healthcare and education has opened the doors for the realty sector significantly. Furthermore, rising number of tourists in the country has pushed up the demand for service apartments several notches up.
