Table of Contents
This report profiles India's property industry, discussing market trends and outlook through 2013 and into 2014 and beyond. The report also highlights leading players in the sector including DLF Ltd, Oberoi Realty Ltd, and Sobha Developers Ltd.
Real estate sector has been one of the key drivers of Indian economic growth during the last decade. India's housing sector ranks fourth in terms of multiplier effect on the economy. However, in the last few quarters, persistent inflation and high interest rates caused a dent in the growth of this sector. Affordability is a major concern for middle class Indians and a steady rise in housing prices, together with high interest rates and inflation, has neither helped their cause nor has it benefited the real estate sector.
FY14 was yet another tough year for the Indian property sector. Economic slowdown, high interest rates, high inflation and the weak rupee contributed towards building a negative sentiment among home buyers that resulted in falling sales volumes within the property market. However, the general election results and incentives announced for the housing sector in the Union Budget have improved property market sentiments in FY15.
o Based on estimates by the Ministry of Housing and Urban Poverty Alleviation, India's total urban housing shortage was around 18.78mn at the start of the 12th five year plan (2012-17).
o According to a study conducted by the Federation of Indian Chambers of Commerce and Industry, the property sector contributed around 6.3% to the country's GDP in 2013 (~USD 100bn). The sector generated around 7.6mn jobs during this period.
o Between January 2000 and March 2014, the real estate and construction development sector saw a cumulative FDI of USD 23bn. The sector accounted for 11% of the country's total cumulative FDI received during this period.
o According to the Reserve Bank of India (RBI), India's house price index grew at a CAGR of 15.7% during 2010-14. The index recorded a y/y change of 11.4% in the fiscal year ended March 2014, which was lower than 19.9% y/y growth recorded in March 2013.
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