Growth of Real Estate in India

History of Real Estate ownership in India

The right to inheritance was from father to sons. Head of the family could give a particular share to his wife. Daughters and sisters were only entitled to receive share in property id father and brothers desired so.

Who maintained the records of buying and selling of land?

Patwaris Tehsildars

It was measured in terms of BIGHAS and KILAS

Reasons why Real Estate has become a buzzword

The US $ 50billion Indian Real Estate market is booming and expected to grow 25% annually. There were 250 new shopping Malls planned in 2007 as against just three that existed in 2002. A new regulation in 2005 allowed foreign investors to bid for Indian construction projects with local partners and also reducing the land holding limit from 100 acres to 25 acres. Demand increased for housing units. An opportunity for development of large scale commercial and residential townships.

Reasons for investment in Real Estate

Government of India opened the construction and development sector under Automatic Rule in February 2006 for 100% FDI (Foreign Direct investment). Decline in Bank interest rates, fixed deposit rotations in stock markets and receding returns on debt mutual funds. There was a remarkable increase in the rental value of 11-12% per annum.

Reasons for investment in Real Estate Contd

Booming Economy Favourable demographics Liberalised FDI Growing at 30% it has become one of the most appealing investment areas for domestic as well as international buyer. It is the second largest employing sector in India. It is linked to 250 ancillary industries like cement, brick and steel.

All round development

Rising income levels of a growing middle class along with increase in nuclear families, changing demographics of home buyers (the average age of a new homeowner in 2006 was 32 years compared with 45 years a decade ago), and easy housing finance has led to a boom in the housing sector. According to Housing Skyline of India 2007-08, a study by Delhi-based research firm, Indicus Analytics there will be demand for over 24.3-million new dwellings for self-living in urban India alone by 2015.

Real estate maturity in India focuses on three primary areas:

Commercial, Retail and Residential.

Commercial Real estate refers to Office space; IT, BPO, KPO space leasing continues to boom with 12 million sqft leasing across India; with 6 million square feet in Bangalore, and 7 million square feet Mumbai. Growth in commercial office space requirement is led by the burgeoning outsourcing and information technology (IT) industry. For example, the organised retail industry is likely to require an additional 220 million sq ft by 2010.

Global Majors
With noteworthy investment opportunities emerging in this industry, a large number of international real estate players have entered the country. Currently, foreign direct investment (FDI) inflows into the sector are estimated to be between US$ 5-5.5 billion. Jones Lang LaSalle (JLL), the world's leading integrated global real estate services firm, plans to invest around US$ 1 billion in the country's burgeoning property market.

 Merrill Lynch & Co has bought 49 per cent equity in seven midincome housing projects of India's largest real estate developer DLF in Chennai, Bangalore, Kochi and Indore for US$ 375.98 million. UAE based real estate company Rakeen and Chennai based mineral firm Trimex Group have formed joint venture company- Rakindo Developers- which would invest over US$ 5 billion over the next five years. Dubai based Nakheel and Hines of the Us have tied up with DLF to develop properties in India. DLF has also formed a joint venture with Limitless Holding, a part of Dubai World, to develop a US$ 15.23 billion township project in Karnataka. Gulf finance house (GFH) has decided to invest over US$ 2 billion in a green field site close to Navi Mumbai.

Contribution of Real Estate activity to India's GDP

Real estate sector in India is the second largest employment generator next only to agriculture. About 250 ancillary industries directly or indirectly depend on real estate activity.