|
Property prices across India have been rising fast thanks to the country’s recent technology boom that is putting more money into the pockets of more young homebuyers than ever before. Unlike many other areas of the world therefore, the demand for real estate – particularly in booming urban metropolises like Mumbai, Bangalore and Hyderabad – is being driven by strong primary demand rather than merely individuals trading up or investment speculation by foreigners.
However, if the boom is to continue authorities need to start taking into serious consideration the dire state of infrastructure in many Indian cities, from the water and electricity supply to the transport networks and roads that get people between home and work. Most worryingly for average Indians and investors alike, the tech boom - and by extension the housing boom - may stall if India’s clogged inner city streets and teaming highways grind to a halt under the weight of the economic success of the world's second most populous country.
Changing the countryside for the city
At a recent conference organized by the EuroIndia Centre, a non-profit organization created by Indian Prime Minister Manmohan Singh and the former French Prime Minister Raymond Barre in 2001, real estate analysts, IT industry representatives, politicians, academics and urban planners among others all emphasized the need to build more urban infrastructure.
India’s urban population accounts for 30% of the total Indian population and produces more than 60% of the country’s GDP – and it is rising fast as more people move from rural areas to the cities in search of better paying work. With the economy racing along at a rate of growth of more than 8 percent per year house prices are rocketing in major urban areas.
Opportunities in the Indian Housing Sector (2006-2007), a report by research firm RNCOS, estimates that the growth of the total housing industry nationwide during the period 2001-2005 was around 5% and is estimated to rise at approximately 7% in the 2006-2010 period. Merrill Lynch forecasts that the Indian realty sector will grow from $12 billion in 2005 to $90 billion by 2015.
That rate of growth can only be sustained, however, if the roads, power plants, schools and hospitals exist to support it.
|
