Indian real estate market opportunities
The Internationl Business Times has an article with the following forecast: Indian realty mart estimated at $60 billion by 2010. It’s all good news for property owners here.
The market for real estate in India will grow five-fold to $60 billion by 2010 and $90 billion by 2015.
The government’s decisions to allow 100 percent foreign investment and entry of venture funds will to add to the growth momentum created by affordable financing options and rising disposable incomes.
Some of my posts about Bangalore residential real estate (and some recent reader comments) might make you think I’m bearish on real estate. That’s definitely not the case, but look at what the article says:
In mature markets of advanced countries, developers can at best hope for 5-7 percent return. But in India, real estate investment yields are in the range of 20 percent.
India has also allowed real estate mutual funds to be floated, it will eventually pave the way for the setting-up of real estate investment trust . . .
This is the key - good yields and good instruments (eg. REITs) for investors. As I wrote earlier, there’s tons of opportunities in commercial real estate & LCH. It’s only some of the metro apartment markets that have gotten out of whack to the point where rental yields for apartment owners are 3-5% at current prices and the entire bet is on price appreciation. The builder/developers certainly make double-digit returns, but the point is - as retail investors, where do we put our money in?
Related Posts: