Indian Real Estate Spiraling Eternally

The previous couple of years have observed constant development, expansion, and intensification as per the stipulation and investments in the real estate sector, which has in turn resulted in stimulating capital appreciation athwart the country, principally in Tier I and Tier II cities and towns. The observation is more pertinent if we consider the residential sector, the rise in demand has been meteoric. The incredible returns offered by real estate segment in the last couple of years seem to be the rationale behind the topical passion. The division provided a record return of 30-50%, compounded annually for the last two years. Contrasting 1996-97, whilst the bull phase sustained for roughly a year, now the prices have constantly firmed up for above the last two years. This has attracted myriad investors to try their luck by putting their capital in the real estate market. Simultaneously, the investment conditions in the real estate have ripened throughout this year.

The stout economical growth of India is anchored in some inherent pros the country socio-economic-cultural, and educational structure of India has. India possesses the largest English speaking human resources (After USA). Indian economy ranks twelfth in the world, in terms of GDP. Hefty and emergent domestic market; mounting purchasing power and consumerism bestow openings for spirited advantage (low cost sourcing of products and services; incomparable class; cerebral skills etc.).

India’s seemingly eternal economic ascent is an auxiliary effect of the feel good factor created by the economic indicators like, the GDP (Gross Domestic Product), Per Capita Income, Forex reserves, FIIs (Foreign Institutional Investments), Foreign Direct Investment (FDI), and industry growth rate which includes the manufacturing and farm sector are all at their record highs. Furthermore, a vibrant and flourishing stock market and a momentous budge from a conservative agrarian and manufacturing based financial market system to a services inclined one, particularly in the urban and semi-urban sector – factors which nearly all economists would approve. As it is a globally acknowledged hypothesis that real estate is amongst the most important contributors to the GDP in any developing economy, it is no dissimilar in India. As a consequence, the optimism has got transferred to the realty estate segment also.

Rationalizing of interest rates, higher per capita income and increased employment opportunities have thankfully ensured that demand is higher from end-users rather than from speculators. Real estate prices in the country have been skyrocketing throughout this year. In various cities and different segments of the property market, prices are rising stridently, ranging from 15% at the stumpy end to 40% for high-demand properties. The admonition sounded by Deepak Parekh, HDFC Chairman also failed to have any beneficial upshot on the inflamed realty market. The envisaged bottoming out of the real estate market has not turned out hitherto. Market analysts suggest countless explanations, like the ongoing buoyant outlook in the market to the dawdling deliverance of stock on the supply side.

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