The ongoing economic boom in India ha caused a sharp increase in the construction of house, office and shopping malls. Naturally, since the supply of land is limited, the price is going up and in big cities like Mumbai, Delhi, Bangalore, Kolkata and Chennai the price hike is 30%-40% annually. This boom market is now attracting a lot realty funds from around the world. Right now, the assets of realty funds in India is nearly $4.7 billion and there are various predictions that the industry could grow from $30 billion to $90 billion by 2010. This sudden and huge increase is the cause of concern. We have seen a melt down in real estate prices in many cities around the world in the last 50 years. However, this fear is not discouraging global realty companies to enter in the Indian market.
The size of Indian real estate sector in 2004 was $292 billion and by 2010, it will become $463 billion. So, we can expect more and more foreign companies entering the market and this would cause a further price hike in the short term.
Now the billion dollar question is- When the burst wil take place!
Do you have any idea?
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