Indian Real Estate market size is expected to reach US$ 180 billion by 2020
Real Estate is one of the most recognized sectors not only in the country but globally. In India, after agriculture, Real Estate industry happens to be the next industry with huge number of employees. The industry has even projected a growth of 30% in the next 10 years. The Real Estate market in our country has become one of the most preferred investment destinations in Asia Pacific belt. In the year 2014, 50% of all investment activities in India were funded for the Real Estate sector which was just 26% in 2013.
The Indian Real Estate market is expected to touch US$ 180 billion by 2020. Leave the commercial aside, only the housing sector alone contributes 5 to 6% to our GDP. The market size of Real Estate sector in India is expected to increase at a Compound Annual Growth Rate (CAGR) of 11.2% in the FY 08-20 period. This tremendous growth in the Real Estate industry has been a result of increasing investments of Private Equity (PE) funds and Non-Banking Financial Companies (NBFCs). The Real Estate sector in India has witnessed high growth in the present times as a result of high increase in number of offices as well as residential spaces. The top most investments in this sector are:
- Nandan Nilekani, co-founder of Infosys Limited invested around US$ 25 million in a Real Estate non-banking finance company (NBFC) unit of KKR India, one of the local arms of the US-based private equity firm KKR & Co LP.
- Google Capital has invested in Bengaluru-based online property search platform, CommonFloor.com.
- SoftBank, Falcon Edge Capital and a few others invested US$ 90 million in Locon Solutions Private Limited, which runs Housing.com – a realty website.
The Government of India along with the different state governments have taken several initiatives in order to encourage the different Real Estate developments. The Smart City Project, where there is a plan to build 100 smart cities, is a prime opportunity for the Real Estate organisations. The Prime Minister of India, Mr. Narendra Modi has already approved the propelling of Housing for All by 2022. Under the Sardar Patel Urban Housing Mission, 30 million houses are to be built in the country by 2022, mostly for the economically weaker sections and low-income groups, through public-private-partnership (PPP) and interest subsidy.
Keeping in pace with the increasing highly aware consumer base and accepting the consequences of globalisation, the developers in the Real Estate sector have shifted gears. The conscious developers have started accepting fresh challenges and building customised homes at par with the customers’ changing demands. The growing flow of FDI into Indian Real Estate is resulting to increased transparency. In order to attract funding, the developers are revamping their accounting and management systems to meet due diligence standards. The overall picture not only suggests the growth but also that Real Estate industry is the emerging sector in India.
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