View from Navyroof.com: Where next for Indian property
Here is the latest Navyroof.com commentary on the Indian property market and the main factors which will determine its recovery.
Current State of Market
The Indian property market has slowed and there has been a big move away from luxury in the current market with developers opting for affordable and low end properties from about 25 lakhs plus (1 lakh is 100,000 INR). The Indian luxury property market will develop in time as incomes increase, but currently developers need cash and are altering developments to unlock cash with more affordable properties.
The market was slowing but ground to a halt with the credit crunch and Mumbai attacks had a major effect on sentiment towards India. This follows the global trend and lack of appetite for property, however there any small signs the worst may be over and some investors are bottom fishing.
Indian Growth
In one of the worst economic crisis, India is still predicting 5-6% growth this year which most nations would die for. The strong results in the elections for the UPA will allow major reforms to be passed, some are expecting further Foreign Direct Investment (FDI) laws to be eased.http://www.navyroof.com/blog/2009/05/18/is-the-worst-behind-the-indian-market.
Liberalisation?
The Indian realty lobby is pushing for liberalisation of the Indian property market which may open the doors to foreigners in India sooner rather than later. Growth is expected to resume its upward trend in the coming years to 7-8% so the future is still bright for India.
The Future
India will grow regardless of what happens globally as its domestic market is so large and very resilient with a growing middle class. India has been exposed to the credit crunch but is suffering the effects of the global slowdown more than anything and will recover strongly in coming years. Prices have had a softer landing then the rest of the world and should stabalise in the next couple of months.
Added to this if the market were to be iberalised prices would dramatically increase, but this is a longer term possibility. India has been quite closed to foreign investors hence it hasn’t suffered as much such as places like Dubai which was investor driven, so why should they open the doors now?
The cautious approach has worked well and kept India largely insolated so don’t expect law’s to change overnight. Recovery will happen and when its does it will be faster in India than the rest of the world.
Have your say by posting a comment below.
Tags: buying property in India, Indian Growth, Indian luxury property market, Indian market, Indian property market, Indian property view June 2009, Indian realty lobby, Mumbai attacks, Navyroof.com
June 18th, 2009 at 11:16 am
A remarkable growth is being expected in Indian real estate market but the major stress would be upon the low cost properties. Many foreign business houses are planning to shift their operations to India because of low operational cost. Apart from that Govt is also going to open the doors for foreign investors to invest in Indian real estate market. So the picture is bright.