Study predicts double digit growth for housing sector

Despite global economic gloom as a result of the sub-prime mortgage debacle and ensuing credit crunch, India’s housing sector remains on course for yet another year of double-digit growth. The growth is attributed mainly to a large population base, rising income level, and rapid urbanization, according to realty research report, “Indian Housing Sector Analysis”.

As India is blessed with one of the fastest growing real-estate markets in the world, it is not only attracting domestic real-estate developers but also the foreign investors, the report by Bharat Book Bureau research, said, adding, the NRI investments in India have a bulk of their share in the Indian housing market.

In view with the ongoing development exhibited by the housing construction industry in India, it is expected that the sector will overtake other industrial sectors in terms of contribution to the GDP growth during the next few years, the report said.

Pointing out that the affordable housing is targeting the economically weaker class and low-income groups and constitutes majority of the Indian housing industry, both in terms of value and volume, the report said, “Besides, luxury housing is also expected to witness significant growth in the coming years as this market segment is comparatively very small and possesses huge potential for further developments.”

 Further, FDI in India’s booming real estate and housing market jumped 80 times between 2005 and 2010. Moreover, private equity funds are also venturing into development of housing projects. The fund houses are developing their own projects in order to endow better returns for their investors, the report observed.

 Factors including steadily increasing life expectancy, lack of safety and security in urban areas and rising number of financially independent senior citizens have made senior citizens an ideal target customer for niche offerings by housing firms, it said.