Research on Indian real estate market by Deutsche Bank About one in every sixth person on earth lives in India and the growth rate of the population is still rapid. The present fertility rate is just over three children per woman. Although considerably lower than in the 1960-70, when women gave birth to five to six children on an average. It is far higher than China (1.7 children/ woman) or Europe (1.4 children/woman). Since the low birth rate is primarily a reflection of better living conditions in India, the rate of population growth has moderated to just 1.5% P. A. Since 1970.
The improved conditions have also increased life expectancy by 15 years to around 65 years at present. In addition, during this period infant mortality has been halved. The high birth rate and fall in infant mortality over the past few decades implies that India's population is very young. One in every three Indians is under the age of 15 and only one in three is older than 35. This compares it favorably against China, where nearly 50% of the population are older than 35 and roughly 60% in Europe.
The three demographic trends i.e. high but falling birth rate, increasing life expectancy and declining infant mortality is expected to persist in the coming years. Only during the third decade of this century population growth rate is set to drop below 1%, by 2030. India looks set to be the most populous country on earth. By 2050, roughly 1.6 billion people will live on the Indian subcontinent, 200 million more than in China. The already impressive number of 700 million people of employable age in India was expected to grow by another 250 million in the next 20 years. Additionally, the valuable economic reform policies, implemented since the early 1990s have created the proper foundation for translating population growth into powerful economic growth.
Cities will continue to grow The United Nations Population Division (UNDP) expects the degree of urbanization to grow over 40% by 2030, implying that the urban population will increase by 2.5% per annum in the next 25 years. Hence, while the rural population increases only marginally. Urban population will double by 2030 around 600 million people. There are two clear outcomes following from this. 1. India's cities must gear up to a dramatic increase in size. Their infrastructure like schools, roads, airports, seaports, and housing capacities will need massive expansion. 2. The accelerated rate of urbanization throws sharp focus on the possibility that established centers (i.e. Tier I cities) is already straining the limits of their capacities, leading to average expansion in the II- tier cities. (Note: Insert image from website.) Massive future demands. India has very strong demand for housing market in the coming decades. In a very unlikely scenario, currently average household size is constant, but the backlog of demand cannot be unwound and no shifts in quality take place. Each year some 4.7 million housing units would have to be completed up to 2030. This figure is based on additional demand of roughly 2.7 million housing units and annual replacement demand of roughly 2 million dwellings. (Note: Insert image from website.)
Price trends in major cities In India, demand for housing markets have picked up considerably in recent years. Powerful demand stimuli have caused shortages in almost all cities, pushing up property prices. Steep rise in energy prices and accelerating land prices are also fuelling the cost of property.
In important cities, prices of residential property have jumped by 25% in 2005. In popular districts, the growth rate over the past 24 months has increased sharply in some parts of Ghaziabad such as Indlrapurem or Vaishali in the north - east of Delhi. For example, House prices have doubled since 2003.
Above - Average economic growth in India: Strong population growth and a large pool of IT workers, greater integration with the world economy and increasing domestic and foreign investments are expected to own India's GDP by 6% P.A. Over the next 10 to 15 years.
Service outsourcing revving up office demand India is the prime destination for IT services outsourcing. In the coming five years of least 55 million m2 of extra office space must be completed in the premium office segment alone.
By 2030 India will need 10 million new housing units per year Rapid population growth, rising incomes, decreasing household sizes and housing shortage of currently 20 million units will lead to extensive residential construction. The financing of owner - occupied housing in particular holds out enormous market potential.
By considering the above Deutsche Bank Research on Indian real estate market You may be considering the idea of investing in land and now you want to make sure that you’re making the right decision. Here are some of the reasons why you should jump into land investment.
Fixed Value Why you should choose land investment over Stock Market? One form of leverage in land investment is ‘fixed value’. While the values of shares may crash in the stock market and there may be a dip in stock, but you will have your land retained at its fixed value. Severe crashes in land and property value are quite rare. Small fluctuations may arise depending on the economy and various other factors. Hence, land investment over the long term is a stable investment in comparison to other investment types.
A Tangible Investment While banking sector is experiencing credit problems and paper value is also facing serious risk, you have your physical investment intact. The security you get from a physical investment is simply incomparable.
Low Risk Historically, the value of land has always gone through an upward trend. This is mainly due to the fact that there is a very limited amount of land. The growing world population is also putting this piece of asset in increasing demand. Hence, the chances of losing your money with your investment are slim in land investment.
Leverage One advantage in land investment is that you get to negotiate its price. With the right negotiating skills, you can bargain the buying price. This is true if you are dealing with a seller who is highly motivated in selling the piece of land or who needs cash right away.
High Return on Investment With right bargaining skills, you can purchase a piece of land at a low price and sell them later, at a much higher price. You may also develop the land and increase your asset’s value as much as a hundred fold. This is one of the ways self - made billionaires have made massive profits in real estate.
Easy - to - Understand Investment You may have heard about scandals involving the Stock Market, and other such investment options. To avoid encounters with such complications in land investing, you can get a good picture of why property prices change and at what rate.
Ownership There is an invaluable sense of pride associated with the idea of ‘ownership’, and you get this peace of mind by investing in land.
Practical Use There are endless possibilities in which land can be practically used. One can develop the land, subdivide it, harvest the resources, rent it, use it as a campground, build a home or business. There is much to gain and practically nothing to lose when investing in land. When all else fails, land investment offers solid investment ground.