Despite previous concerns from some analysts, real estate throughout India remains a major investment opportunity both for Indian natives and foreign investors. While you may have heard some concerns about the real estate market in India growing into a bubble that was ready to burst, analysis of recent trends makes such a burst quite unlikely. Future growth, as the region continues to stabilize politically, is far more likely. Whether you live in India or you’re just looking for some new investment opportunities, there are a few different markets you should definitely consider.
The Best Way to Invest
Like any other business, real estate markets are often based upon overall supply and demand. When it comes to real estate in India, the supply is there and the demand just keeps getting bigger. Much of this demand comes from two sources: increasing numbers of elderly citizens, and workers pushing toward the middle class. More and more housing will be needed for elder care in the coming years, and investment in real estate for these types of structures is quite popular. A lot of younger workers are also pushing their way into a growing middle class throughout India, and many of them will look to buy homes and other property in the years to come.
Companies like Unitech Group exist to help you find new real estate opportunities throughout India, both for commercial and investment opportunities. Unitech property in India includes just about anything, from residential projects in Kolkata in the eastern portion of the country to commercial projects in cities like Gurgaon to the north. You can contact these companies for information about what specific regions are best for investing and to determine how you should move forward with any projects that catch your interest.
Major Growth Still Ahead
Although the real estate market in India has been growing steadily for a decade, there’s still quite a lot of growth expected in the years to come. Global investment in Indian real estate totaled $29 trillion in 2012, but it’s expected to grow to $45.3 trillion by 2020, according to PricewaterhouseCoopers, one of the largest professional services firms in the world. That’s a 55 percent increase in a region that has already proven it to be wildly popular with investors.
With changes that started in 2004, India really opened its borders up to investors from all over the world. This created an atmosphere in which you can buy a lot of property in a wide range of different areas through India, all at reasonable prices. While an office in Hong Kong could cost you more than $20,000 per year per workstation, according to global realty consultant DTZ, a similar office in Hyderabad, India would cost you only $1,250 per year per workstation. Even more expensive areas of India like Bangalore still come in at under $3,000 per year per workstation, according to DTZ. In fact, five out of the 10 least expensive office-market cities in the world are in India, and there are no signs of this changing any time soon.
Concerns about a Bubble
If you look into the real estate market in India, you might see some analysts demonstrating concerns about a potential bubble in the market and the likelihood of such a bubble bursting. While precise predictions are difficult, there are a number of experts who look at India and don’t see a bubble. For one thing, a bubble typically follows a structure in which a market expands very rapidly over a short period of time, usually just a few years. Real estate profits in India have been on the rise for a decade, however, and are likely to remain stable with new political leadership in the country.
When considering whether a bubble is forming or not, it’s often helpful to look at the confidence levels of business owners in a market. About 78 percent of business leaders in India and other Southeast Asian countries are optimistic about the future of their region, according to the Grant Thornton International Business Report. You can compare this number to other regions like North America, where only 56 percent of business leaders are optimistic or European nations where there is very little optimism for the foreseeable future. When a bubble is about to burst, business leaders typically see it and react accordingly. In India, however, investors continue to see a multitude of new opportunities for real estate growth and development.
Invest for the Long Term
As you look to India for investment or real estate growth, keep in mind that you should plan long-term before jumping in too deep. There’s a good chance that real estate prices in India may decline 5-10 percent over the next year, according to one report from real estate consultants Cushman & Wakefield. This will be the perfect time to invest, as the cyclical nature of real estate will inevitably bring those prices back up over the next few years, as long as you have the patience for such speculation.