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August 03, 2015

Real estate is one of the fastest growing sectors of the Indian economy and contributes about 5 per cent to India's gross domestic product (GDP).

The country's economic growth is driving the demand for real estate in India. Demand for residential space is expected to grow at a compound annual growth rate (CAGR) of 19 per cent between 2010 and 2014 - Tier 1 metropolitan cities are expected to account for about 40 per cent of this. The top three cities - Mumbai, the NCR and Bengaluru account for 46 per cent of total demand for office space in India.

Foreign direct investment (FDI) of up to 100 per cent is allowed with government permission for developing townships and settlements. FDI of up to 100 per cent is also allowed in the hotel and tourism sector through the automatic route. The Government of India (GOI) has raised the housing loan limit to US$ 52,080 for priority sector lending. Further, US$ 833 million has been allocated for rural housing fund (RHF) in FY13 budget.

Growing requirements of space from sectors such as education and healthcare provide opportunities in the real estate sector. Emergence of nuclear families and growing urbanisation has given rise to several townships.

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