Driven by positive growth in the economy, real estate in India is booming. The year 2006 started on a promising note when the Government of India opened the construction and development sector in February 2006, and allowed 100 per cent foreign direct investment (FDI) under the 'automatic route' in order to spur investment in the vital infrastructure sector. The government has thrown open the lucrative parts of the Indian realty market to global investors for the first time.
The relaxation of the FDI ceiling saw big names joining hands with the Delhi-based developments to announce India's largest FDI in the realty sector. Groups showing interest in India includes major Indian and international companies.
The development of real estate in India focuses on two primary areas: retail and residential.
The organized segment is expected to grow from a mere 2 per cent to 20 per cent by the end of the decade, it said.
The boom is also attracting interest of foreign players. In recent years, non-resident Indians (NRIs) have played a very important role in transforming the Indian real estate market. Opening-up of the Indian economy provided them with new opportunities and they have shown a great deal of confidence in the changed set up. Since 1994, NRIs have invested a sizeable amount, of which a big chunk has found its way into the property market. Participation by NRIs has brought about a lot of maturity in the market, which in the past was solely banked on the actual users.