A FEW GOOD REASONS TO INVEST IN INDIA
High Returns
According to a recent study returns from rental incomes on investment in commercial property is around 10.5%, the highest in the world. Real Estate in India is now considered as one of the hottest investment options as compared to Bank Deposits or Bonds where your return ranges between 3-5%. Due to heavy demand and upward prices, investment and speculative interest in real estate is growing while excess money supply, stock market gains and policy changes are adding to the trend in favour of the Real Estate sector. In the last year the capital values of the commercial office spaces has increased by up to 40% owing to the increase in the demand from the IT sector across all major cities in India.
Low Interest Rates
Lower interest rates, easy availability of housing finance, growing salaries and job prospects have given a boost to the residential sector. The net rental yields (after accounting for all outgoings) on residential property are currently at 4-6% p.a. However, these investments have benefited from massive growth in residential capital values. As such, investors can count on potential capital gains to improve their overall returns. Overall capital values in the residential sector have risen by approximately 25-40% per annum in the last 2 years.
Over the past few years there has been a rush to invest India with super power status. Banks predict India will become the world’s third largest economy in the next couple of decades, a CIA report forecasts that the 21st Century will be India’s. Every visiting foreign dignitary pauses to pay tribute to India’s relentless ascent to economic international glory.
Across India, total exports – mostly manufactured goods – are rising at 26% p.a. as reported recently by the Commerce Ministry. The manufacturing sector is growing at 9.4% annually. Special Economic Zones (SEZs’) are now spreading and 75 are in the works with more than a dozen already operating.
India’s hotel industry isn’t keeping with the country’s hectic growth. As the nation’s economy booms, foreigners and newly affluent Indians are flocking to the countries big cities in unprecedented numbers but are finding a shortage of places to stay.
ICICI Bank of India is seeking to borrow the equivalent of $1billion dollars. It is seeking these funds to meet the loan growth in India, the world’s second fasted growing nation after China. Lending has surged 30.5% in the past year. Conditions in India are conducive to growth and ICICI is known as an aggressive Bank funding growth.
An estimated 25 million non-resident Indians living across 125 countries are investing several billions in the India real estate markets. As India’s booming economy yields more opportunities and better living conditions for the affluent, overseas Indian’s are themselves considering a return to the Motherland. The situation is completely reversed. Indians from all around the world want a piece of the action in India. There is a huge difference in attitude over the last 5 years. The government is actively encouraging participation from overseas Indians. Certainly India hopes to transplant the successes of overseas Indians back to the homeland soil. And these days, it is not hard to convince growing numbers of them of the opportunities growing at their roots.
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