Indian real estate has huge potential
in almost every sector especially commercial, residential, retail, industrial,
hospitality, healthcare etc. However, the major developments in this sector in
India are mainly the townships, residential units, shopping malls, offices,
retail stores and commercial complexes.
Real estate investment in India is
primarily a long term investment providing low liquidity to an investor.
Investors can look at renting out their property to bring consistency in
revenues. This can also reduce the burden of EMIs for a property purchased on a
loan. According to a survey conducted by ASSOCHAM, 65 per cent of working
individuals prefer this sector as a mode of long term investment.
Real estate in India is the second
largest employing sector including construction and facilities management. This
sector is linked to about 250 supportive industries such as cement, brick,
transport, steel, etc through backward and forward linkages. Accordingly, a
unit increase in expenditure has a multiplier effect in this sector, as
capacity to generate income is as high as five times.
Rising income levels of a growing
middle class is the main reason for growth in the real estate. Apart from the
income, other factors such as increase in nuclear families, low interest rates,
modern attitudes to home ownership and a change of attitude amongst the young
working population are responsible for real estate development. Therefore, it
can be said that real estate property have changed the attitude from 'save and
buy' to 'buy and repay' to boost housing demand.
The rise in real estate was very high
in the metro towns of Mumbai, Delhi, Bengaluru, Gurgaon and Chennai. Even the
small towns like Indore, Chandigarh and Coimbatore witnessed a property boom.
Much of this price rise was artificial and a correction did take place. With
the onset of recession and loss of jobs and industrial production some of the
big names in Real estate like DLF, Unitech and Hiranandani took a beating and
had to shelve many projects.
