India has become the fifth largest retail market in the world today with its huge growth in retail sector. The cost of properties has risen considerably over the years making the real estate market a booming one. In fact, Investment in a property has turned into a productive option for majority of people. This has also made Property developer's billionaires overnight, with profit overflowing in the sector. The chief driving force behind this realty boom in India is the steady extension of IT industry and the subsequent development of the middle class status. Both commercial and residential growth is running at a marathon pace. The most favoured cities for investors are Bombay, Bangalore, Hyderabad, Madras,Gurgaon, New Delhi, Pune, Chandigarh, Calcutta and Jaipur.
Reasons for Growth
One of the main reasons for this boom is that in the year of 2006, Indian government has given her consent to 100 percent foreign direct investment. These enabled foreign residents maximize their profits through bidding for Indian real estate along with their local associates.
The growth may be also attributed to several factors such as economic reform and liberalization, increased globalization, increase in business opportunities, heightened equity market activity, increasing demand, enhanced transparency, legitimized funding and favourable demographics. Real Estate Venture capital funds have propelled Indian Real Estate industry to become one of the highest investment generating avenues Also the fact that India's seven Real Estate powers like DLF and Unitech are their in the Forbes list of 54 Indian billionaires crystallizes the sector's strength. Industry was able to attract significant interest from domestic and foreign investors keen to be a part of the real estate growth
The Future Trends
The real estate industry is estimated to reach $60 billion by 2010 with a growth rate of 30 per cent. The industry entered the Dalal Street in a big way and floated 12 public issues in the year, making it a leading sector in terms of fund raising. Currently, private property developers are largely focusing on constructing housing units for middle class and poor. Rising disposable income and the trend towards nuclear families are the significant factors pushing the demand for residential properties in the country.
Many eminent foreign builders like Dubai-based Emmar Properties have shown keen interest in Indian real estate and have joined hands with Indian constructors for investment. Other major foreign players in Indian realty market includes Japan's Kikken Sekkel, UK's High Point Rendel , Cesma International and Lee Kim Tah Holdings from Singapore, etc. It is expected that all these foreign investors will exercise latest technology, management skills and regulation policy to make it big in Indian real estate market
Another factor that plays a critical role in the current trend in the Indian Real Estate industry is the development of physical and social infrastructure. Residential, commercial offices, retail and hotels have their own place in the market. The presence of real estate majors from within India as well as abroad have ensured constant supply of capital which is absolutely necessary for the large scale of development that has been undertaken, especially in the infrastructure expansion of roads, airports, ports and SE's that require large funding India's biggest realty developer, DLF continued its supremacy over others. The firm launched the country's largest IPO of over Rs 9,000crore, followed by HDIL's Rs 1,700 crore and Puravankara Projects' Rs 850 crore.