Foreign investment in Indian real estate is likely to rocket by around $21 billion over the next decade, according to experts.
Outside buyers currently account for less than around $4 billion in property development in the country, with government restrictions thought to be holding the figure back.
But reform is expected which would allow foreigners to invest in bigger developments, according to the Associated Chambers of Commerce and Industry of India (Assocham).
The group said:
“Despite the real estate market being confronted with a temporary depression with real interest rates hovering between 12 and 16 per cent, Assocham projects that FDI’s [foreign direct investment] in the real estate market will increase by about $21 billion
to touch $25 billion in the next 10 years.”
India is experiencing a housing shortage, with about 20 million new homes needed, with seven million of them needed for cities.
Despite this, the Indian market is currently experiencing a slowdown, which is viewed by analysts as a correction after four or five years of tremendous growth.
Rental rates in urban areas such as Delhi remain buoyant despite the slide, with some rents increasing by around 13 per cent in the first three months of 2008.
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