Indian Real Estate Industry - The Giraffe's Neck

The Indian economy has witnessed crucial changes inAccording to the recent survey conducted by AT
the last 15 years. Simultaneously, all industrial sectorsKearney, India is the second best investment
have felt the influences and after-effects of thisdestination after China. The magnificent FDI flow into
positive atmosphere. Now, India is one of the fastestthe Indian real estate industry has transformed into
growing economies in the world, with an 8% GDPan organized segment with global standards, contrary
growth for last three years. IT, retail, infrastructureto the erstwhile industry that had been marked by
and industry; all these sectors have now attained afragmentation, disorganization and poor governance
high altitude.and unprofessional approach.
Indian Real Estate industry has flourished keepingThe credit for this metamorphosis must go to the
pace with feel good economy. In the last fifteensignificant pouring in investment, not only from within
years, and more specifically in the last 3 years, thisIndia but from abroad. The last couple of years have
segment has observed a boom phase. The graph iswitnessed the increasing interest of international
on the compounding increasing path.majors in investing in Indian real estate market. This
The growth in the Indian real estate sector may bekeen attention has brought into focus the emergence
attributed to several factors such as economicof private fund pool in this sector. Now, the industry
reforms and liberalization, increased globalization,is growing at 20% per annum. This unabated growth
increase in business potentials, heightened equityhas falsified the brows of skeptics who were worried
market activity, increasing demand, enhancedthat this spurt might be the end of the bubble. The
transparency, legitimized funding and favorable skilledsecond factor that plays a critical role in the current
demographics. Reformative actions taken by theboom is the development of physical and social
Govt. of India like opening of FDI in the Real Estateinfrastructure. Residential, commercial offices, retail
sector and Real Estate Venture capital funds haveand hotels have their own place in the prime
offered a drive to the boom. Now, this segment haslocations. The easy availability of loans has worked as
become one of the highest investment generatinga catalyst.
avenues.