Foreign Investors Remain Bullish on India's Housing, Real Estate Sectors

Strategic Insights -

Despite scarce global financial resources, foreign investors have continued to pump in funds into India's housing and real estate sectors, driven by the country's burgeoning economy and liberal foreign investment norms. The sharp rise in Foreign Direct Investment (FDI) in the Indian construction and realty sectors from US$1.19 billion in April-December 2007 to US$5.6 billion in the first three quarters of the current fiscal is a testament to this trend. India's government has been actively promoting investment in the real estate sector, allowing 100 per cent FDI through the automatic route in construction development projects.

Key Takeaways:

  • Foreign investors have remained bullish on India's housing and real estate sectors, with a sharp rise in FDI inflows from US$1.19 billion in April-December 2007 to US$5.6 billion in the first three quarters of the current fiscal.
  • The Indian government has liberalized foreign investment norms, allowing 100 per cent FDI through the automatic route in construction development projects, including housing, resorts, and commercial premises.
  • Global property consultant Jones Lang Lasalle Meghraj has reported a 29 per cent year-on-year increase in deployment of FDI into India's real estate sector during the financial year 2009.
  • Dubai-based Emaar is a major foreign investor that has entered the Indian market in a big way, driven by India's growing economy and liberal investment policies.
  • The Indian government has imposed certain conditions on FDI, including a lock-in period on repatriation of investment for three years, which can only be allowed with the permission of the Foreign Investment Promotion Board.

Statistics:

  • FDI inflows into equity in the Indian construction and realty sectors rose from US$1.19 billion in April-December 2007 to US$5.6 billion in the first three quarters of the current fiscal.
  • The average annual growth rate of FDI in the real estate sector was 29 per cent during the financial year 2009, according to Jones Lang Lasalle Meghraj.
  • The total FDI in the construction and realty sectors for the first nine months of the current fiscal was US$5.6 billion.

Sources:

  • Asia Pulse, "Foreign Investors Remain Bullish on India's Housing, Real Estate Sectors"
  • Ministry of Commerce and Industry, Government of India (no specific date mentioned)
  • Jones Lang Lasalle Meghraj, "India Real Estate Report" (no specific date mentioned)
  • PTI, "Emaar Eyes More Retail Space in India" (no specific date mentioned)