The real estate in Indian market is constantly changing and developing at a rapid pace. The most preferred destinations of last year may not be the better options this year, while next year might bring certain unparalleled set of investment destinations in the real estate market of India. As such nothing can be predicted in advance in this sector.
The basic reason for this changing situation is that the real estate is booming which is causing most of the country’s metros and also certain previously popular Tier II towns to modify at an unequalled pace. The prices of the immovable property have actually reached sky heights which might be beyond the reach of the middle class group, but it still forces them to expect a little more abroad each year. The investors assess these trends of migration, examine the magnitude and range of growth and determine certain new towns as the next destination.
The Information technology (IT) companies are these days the capital growth drivers in the real estate market of India and are stunningly not dependent on the central business locations. The core of the entire boom of outsourcing is that it sorts more awareness for the multi-nationals to transfer the functions of back-office and even undergo extensive research processes to India rather than undertaking them in their home countries.
As a matter of fact both the end buyers and sellers of the IT-based services and products are based overseas anyway. This basically means that the IT/ITEs (information technology enabled services) establishments have the potential to function from anywhere in India, as far as there is accession to skilled work force and other required infrastructure.
In fact, these companies can conveniently profit from the asset of cheap real estates while the prices in small towns have made-up the way for the city boom of Tier II/III. However, the IT/ITEs companies basically serve as catalyst for almost every sector of real estate in India and as such the retail, infrastructure and residential sectors would very soon start perking up in those particular localities too.
The main mantra of the real estate investment is however, the emerging localities are actually more preferable than the established and the saturated ones. The established regions sooner or later would reach a eminent altitude in terms of apprehension potential, no matter after that the growth rate may either stagnate or slow down.
It has also been witnessed there is quite a little scope for the new and latest market drivers like malls to get a preferred place in concentrated regions - while, the prices remain high.
However, it can be elaborated that this is actually not a preferable scenario from the profitable investment point of view as the best investments need low entry levels and considerable growth and that also in a realistic time-frame. As such it has been witnessed that though one or more than one destination reaches their peak potential on almost all the accounts, the new destinations obviously come into limelight instantly.
It is also quite worth mentioning that in this quite unstable financial market where unsecured and personal loans charge the sky rocketing interest rates, the rates of interest in loan against property are following the reverse path. This particular situation has geared the growth of real estate in India.
The boom in the retail market actually has a significant impact in the commercial real estate market. In fact, the actual size of the wholesale sector in India is about Rs. 8,10,000 crores and amazingly out of it just 2% is unionized or comply corporate constitution. However the Indian retail sector is steadily growing at a pace of 20% per annum and what is more important, the unionized pie of this sphere was calculated to grow from 2% of the whole wholesale market in 2001 to 22% in 2005.