News & Views on Indian Real Estate

Friday, March 21, 2008

India among top three – Global realty markets

The Indian Real Estate industry is on a roll be it in the country or outside. The sector has witnessed immense growth in the past couple of years. The phenomenal increase in the Real Estate demand and access to funds were the key drivers for propelling the Indian real estate market into an overdrive.India has attracted $3 billion worth of real estate stated by government official report of March 2007. This booming India real estate market is currently more expected to contribute for concerning $30 billion in the upcoming years. When evaluated to last year, real estate 2007 has gone doubled.

In the league of the most preferred property market among foreign investors globally, US has retained its top position, while China was ranked second followed by India, a survey conducted by the Association of Foreign Investors in Real Estate (AFIRE) said.

China moved to the second place, garnering 21.4 per cent votes and displacing India in the process, which was preferred only by 16.7 per cent of the respondents favouring the country as the most fancied place for real estate investment.

In 2006, China got 14.6 per cent votes while India had 18 per cent and was ranked in the second position.
One of the significant findings that cannot be overlooked is the jump in investors’ confidence in China. For the second time in three years, China has been voted as the country offering the second best chance for capital appreciation after the US.

Interestingly, the United States, whose economy continues to be bogged down by the subprime crisis and faces the threat of a recession, still managed to retain the the 'most preferred destination' tag for real estate investment.The annual survey respondents included nearly 200 members of the association and was conducted in the fourth quarter of 2007, after the credit crunch and sub-prime mortgage crisis.

Going forward, we expect the Indian real estate market to witness greater M&A activity driven by consolidation and the growing maturity of the market.