Boom & Bust of Indian Real Estate Sector

Engulfing the time scale of stagnation, the evolution of Indian real-estate sector has been phenomenal, impelled by, growing economy, conducive demographics and liberalized foreign direct investment regime. However, now this unceasing phenomenon of real-estate sector has begun to exhibit the signs of contraction.

Exactly what do be the causes of this type of trend in this sector and what future course it will need? This short article tries to get answers to these questions...

Overview of Indian real-estate sector

Since 2004-05 Indian reality sector has tremendous growth. Registering a growth rate of, 35 per cent the realty sector is estimated to be worth US$ 15 billion and anticipated to cultivate at the rate of 30 per cent annually over another decade, attracting foreign investments worth US$ 30 billion, with a number of IT parks and residential townships being constructed across-India.

The term real-estate covers residential housing, commercial offices and trading spaces such as theaters, hotels and real estate agent in glenfield restaurants, retail outlets, industrial buildings such as factories and government buildings. Property involves purchase sale and development of land, residential and non-residential buildings. The activities of real-estate sector embrace the hosing and construction sector also.

The sector accounts for major source of employment generation in the country, being the 2nd largest employer, alongside agriculture. The sector has backward and forward linkages with about 250 ancilary industries such as cement, brick,steel, building material etc.

Therefore a unit escalation in expenditure of the sector have multiplier effect and capacity to generate income as high as five times.