India, like many other parts of the world is zooming away in the face of a real estate boom. In India there is a real estate boom in any direction you wish to see. Whether it is Bangalore, Pune, Calcutta or Chennai or Hyderabad or even already sky high Mumbai and Delhi - the story is the same.
Now apartments are more than just houses. They are about lifestyle. So while the first housing colonies had nothing but a security guard, these new housing colonies have a gym (spa, Jacuzzi, steam), swimming pool (heated, lined with Italian marble).
Some have a multiplex, shopping complex. There are those which offer a servant entrance. The next step is creating an ambience. What does one differentiate in a house? So you now have themed houses.
The concern is that in India, stock prices are at the height of a boom. As it happens, a boom in one sector translates into a boom in another sector with investors rushing to park their money in a safe place. Also, add the foreign exchange glut in India fuelled to a great extent by software engineers parking their dollar salaries in real estate (especially near the tech hubs). Low interest rates (relatively, as compared to 10 years back) over the last few years made bank loans easier.
Driven by positive growth in the economy, real estate in India is booming. The year 2006 started on a promising note when the Government of India opened the construction and development sector in February 2006, and allowed 100 per cent foreign direct investment (FDI) under the 'automatic route' in order to spur investment in the vital infrastructure sector. The government has thrown open the lucrative parts of the Indian realty market to global investors for the first time.
The relaxation of the FDI ceiling saw big names joining hands with the Delhi-based developments to announce India's largest FDI in the realty sector. Groups showing interest in India include major Indian and international companies.
The development of real estate in India focuses on two primary areas: retail and residential.
The global real-estate consulting group Knight Frank has ranked India 5th in the list of 30 emerging retail markets and predicted an impressive 20 per cent growth rate for the organized retail segment by 2010.
The organized segment is expected to grow from a mere 2 per cent to 20 per cent by the end of the decade, it said.
The boom is also attracting interest from foreign players. In recent years, non-resident Indians (NRIs) have played a very important role in transforming the Indian real estate market. Opening-up of the Indian economy provided them with new opportunities and they have shown a great deal of confidence in the changed set up. Since 1994, NRIs have invested a sizeable amount, of which a big chunk has found its way into the property market. Participation by NRIs has brought about a lot of maturity in the market which in the past had solely banked on the actual users.