Why Invest in India?

The Indian economy is witnessing high growth; with rising GDP, better infrastructural facilities, industrial development and more and more MNCs setting up offices in the country. This has lead to an equal rise in the real estate sector in the country, with real property also witnessing a boom in all the major parts of the country.

The prices of residential, commercial and industrial properties are experiencing an all time high with increasing demand not only from the domestic, but also foreign investors. The Indian real estate sector has huge potential demand in coming years. Government in different states is allotting more land for residential, commercial and industrial purpose for meeting the growing demand in the coming years.

Reasons of Real Estate Growth in India

• Boom in IT and BPO sector: The boom in the real estate sector all across the country can be attributed to the growth in different industries, especially in the IT sector. Most MNC companies have set up corporate offices in various states, especially the NCR region, leading to the rise in demand for industrial real estate. India has also become a hub for outsourcing. A large number of international companies outsource a large number of processes to India, leading to an increased demand for office space.
  
  
• High Rate of Return: Gone are the days when investing in shares and other bonds was considered one of the best investment options. Real estate is considered to be the best investment option yielding highest rate of returns. Rental incomes from investment in properties is also yielding high returns. It is now being considered as one of the most profitable and attractive business opportunities in the present real estate scenario.
  
  
• Housing Finance and Interest rates: Lower interest rates, combined with easy availability of housing finance, rising disposable income and better paying jobs, have together given a boost to the demand for residential properties in India.
  
  
• Growth in Retail Sector: The current growth in the retail sector is another significant reason for the growth of real estate in India. With the rising, shopping mall, entertainment and theme park culture, more and more real estate developers are constructing malls, multiplexes and entertainment parks leading to a rise in demand for commercial property. Large companies like Reliance are also getting into the retail sector. Rising disposable incomes and opening up of FDI in the retail sector, have also pushed the growth of real estate in the country.

Real Estate Scenario
The Indian real estate sector is one of the best investment options and hence both domestic and international investors are heading towards the country. The prices of real estate in certain parts of Delhi and Mumbai are comparable with the highest in the world. With the rise in this sector, investors can make the highest profits and return on their investments in the shortest period of time.

The table below depicts the estimated demand and supply of real estate in different parts of the country.

Market	Absorption in 2006 (million sft)	Estimated Supply in 2007 (million sft)	Estimated Absorption in 2007 (million sft)	Excess supply ( % of Estimated Absorption)
Delhi NCR	10.6	15.9	13.2	20%
Bangalore	12.0	18.3	13.3	38%
Chennai	5.3	19.5	6.5	200%
Pune	4.6	14.3	5.8	146%
Kolkata	3.9	8.3	5.0	66%
Hyderabad	3.8	6.1	4.6	33%
Mumbai	6.4	6.9	7.5	8%

The central and the state governments are making efforts to encourage real estate investments by global investors and NRIs. The government has allowed FDI in the realty sector and therefore major foreign investors are tying up with Indian realty developers to start residential, commercial projects. These companies are undertaking world-class projects keeping the NRIs in mind.