A recent E&Y report ranked India fifth among nine select economies for future real estate investment and attributed it to a growing economy.
In a study conducted by global consultancy firm Ernst and Young,India ranks fifth in the overall country ranking among nine select economies including China,the US,the UK,Brazil,Singapore,Germany,Russia and UAE for future real estate investment.The report was presented at FICCI International Real Estate Summit 2010.
According to the report,India would have ranked even higher if it had a better regulatory mechanism in the sector.It ranked fifth mainly due to its parameters as one of the fastest growing economies in the world and a large young population.In the past several years,the Indian economy has been driven by growth in the services sector,which contributed almost 64% to the GDP during 2009.Economic growth has also resulted in rising income levels in the country.
Currently,more than 60% of the country's population is in the working age group and another 170 million is expected to be added to the labour pool by 2025.Economic growth and rising income levels have increased the demand for quality real estate in the country,report says.But the supply is not adequate,which provides ample investment opportunities in the country,it added.According to the 11th Five Year Plan (2007-2012 ),the housing shortage in India is estimated to increase from more than 24 million units in 2007 to 26 million units by 2012.The improving economic situation and the launch of affordable housing projects and price rationalization by developers have helped improve demand for residential real estate,the report says.In the future,the affordable and midsegment categories are expected to account for a major portion (85%) of residential demand and will likely remain the focus area for most developers.
Overall,on a pan-India basis,the report says,the demand for office space is expected to total 180 million square feet by 2013,with seven major Indian cities - Bangalore,Chennai,Hyderabad,Kolkata,Mumbai,the NCR and Pune - catering to 75% of the total demand.
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