The Real Estate Market in India is counted amongst the major players in the world. As per the studies by leading research companies like PricewaterhouseCoopers, it occupies the 9th position in the world market. The flourishing scenario of the Real Estate Market is actually backed by the various factors that continue to aid its growth, resulting in a win-win situation for both the investors as well as the country's economy. Here we outline the key factors responsible for the sector's growth and the initiatives being taken for the development of the Indian Real Estate Market in India.
Factors Responsible for the Growth of Real Estate Market:
Indian Demographics With the population running into billions and rapid growth, there is a greater need for residential housing and commercial establishments as well. Each year there are around 2 million students who pass out from various universities, stimulating the demand for office space.
Economy The Indian Economy is growing at a rate of 8% approximately, which is a good sign for Real Estate Market, making it highly lucrative for Investors from all over the country and around the globe. The purchasing power has increased substantially, leading to a spurt in residential housing and commercial development projects.
Infrastructure The infrastructural development is a great support for this sector. Looking at the growth opportunities, many private players have joined hands with the government in this regard.
So what fuels this growth?
Most importantly, the initiatives being taken by the Government, Financial Institutions and the Real Estate Development companies are majorly responsible for the development of this sector and these are being discussed below: Government Schemes undertaken by the government are a major reason why the Real Estate Market is going through this growth phase. Some of the key initiatives being taken to explore its potential and cater to the demand-supply gap are: As per the Union Budget of 2010-2011
- Funds allocated for Urban Development were increased from US$ 660.3 million to US$ 1.17 billion
- Increase in allocation of funds for Housing funds from US$ 183.4 million to US$ 215.8 million
- Allocation for the Rajiv Awas Yojna increased from US$ 32.4 million to US$ 274 million
- 100% Permission to the foreign investors to invest in urban infrastructure, townships and housing and development projects
- Development of Special Economic Zones (SEZ) through 100% Foreign Direct Investment, subject to the SEZ Act 2005
Easy availability of Loans for financing the development of real estate is another factor chiefly responsible for the prosperity in this sector. Many leading banks in India like ICICI, HDFC, ABN Amro etc. are providing Housing Loans and Loans for Commercial Construction at attractive interest rates with easy payment options.
Role of Real Estate Development Companies
In a sharp contrast to the earlier setting, where the Real Estate Sector was highly unorganized, now there is an increasing presence of highly professional Real Estate Development players in the market. These companies have much expertise and have bagged large-scale projects to be developed for both the Commercial and Residential segments.
The Indian Real Estate Scenario is set to improve further in the coming years, which will lead to a growth in other industries as well. In the coming years, there will be a marked presence of foreign players resulting in more organization of this sector. Since the Real Estate Market is more stable than Equity or Stock funds, so it presents an attractive opportunity for all the investors. The rise in transparent dealings and liquidity is set to add to the development in this sector by a great magnitude in the future.