In recent times, no other sector has generated the kind and amount of interest, nationally as well as internationally, as the booming realty sector in India has. A surge in demand for residential as well as commercial properties has seen the domestic realty sector record a `super' growth of over 30% during the past couple of years—a rate, hardly any other sector could rival. It is expected to grow 45% during the current fiscal. The boom has come riding on the back of a strong economy that has grown at a robust rate of over 8% during the last two years, continued growth of IT and ITES industry, a happening retail sector, thrust on infrastructure development and Special Economic Zones (SEZs), rising disposable incomes, a change in the mindset of traditional Indian middle-class towards owning a house, and last, but not the least, a slew of reform measures that include 100% FDI in construction and serviced land development. No doubt, they all have played a vital role in the revival of what was once almost a moribund sector. Against this backdrop, The Analyst invited experts to share their perspectives on the sector and related issues.

The real estate industry in India has grown by leaps and bounds in the past 7-8 years. Contributory factors for this growth include: higher salaries in the software, financial and a few sunrise industries that have improved the purchasing power of the salaried class, fueling the demand for residential apartments and houses; fall in the interest rate for housing loans from 12-14% to 7-9%; income tax benefit on interest paid for housing loans up to Rs 1,50,000 for individuals and up to Rs 3,00,000 for families; deduction under Section 80CCE of the Income tax Act on the principal housing loan amount repaid; increasing demand for commercial space as a result of the boom in software and other industries, malls and shopping complexes; and the growing craze for setting up Special Economic Zones (SEZs).

These have resulted in the Indian real estate sector contributing substantially to the economic growth and GDP.  The following statistics are worth mentioning in this context. The average annual addition to residential space is 2.3 billion sq ft. In other words, an average of over 2 million dwellings are built every year. Added to this are an additional office space of over 60 million sq ft and 25 million sq ft of retail. The investment required in the next few years is $20 bn, and the investment required for the above activities is estimated at $91.5 bn annually contributing 6-8% to GDP.

The Analyst Magazine, Indian Real Estate, Realty sector, Special Economic Zones, SEZs, ITES Industry, Income tax Act, Indian economy, Foreign Direct Investment, FDI, Gross Domestic Products, GDP, Export Processing Areas, EPAs, Real Estate Mutual Funds.