Emerging markets have been synonymous with growth, but the outlook for individual nations is constantly changing, which is a cause for concern among would-be investors. India, conversely, as one of the so-called BRIC (Brazil, Russia, India and China) nations, is an economic powerhouse, a beacon of light amidst a group of nations that is fast losing its shine following a slowdown.
When Indian Prime Minister, Narendra Modi arrived in the US in November last year, he was greeted warmly by President Obama, who punctuated the moment with the words: “In Asia and around the world, India is not simply emerging; it has emerged.”
Scientist and geopolitical expert, Ian Bremmer recently asserted that India was the last BRIC standing, and as such the country is feted as one of the BRIC nations destined to be among future world economic powers. According to a report published by PwC, India will be a ‘star performer’ among emerging market economies and is expected to clock 7.7 percent growth in 2016, outshining China for the second consecutive year.
Despite the World Bank’s forecast cuts for global economic growth, India is the only BRIC country expected to see notable improvement in economic performance in 2015.
A large part of India’s economic growth is down to foreign direct investment (FDI) in Indian infrastructure and Smart Cities, as encouraged by Narendra Modi’s ‘Make in India’ campaign. DLF, one of India’s biggest property development companies, was established in the same year India gained independence from the United Kingdom (1947), and since then has played a significant role in building infrastructure and Smart Cities; in short, in building modern India.
DLF’s latest project is DLF5, a state-of-the-art, integrated development offering high-end residential, commercial, retail and community facilities aiming to provide a world-class lifestyle in Gurgaon, and the Company’s Executive Director, Aakash Ohri – who has been instrumental in the growth of DLF’s luxury real estate in all phases of its development – believes India’s burgeoning property development sector is ripe for investment.
“Now’s the time to dip your toe back into emerging markets”, says Ohri. “India, the biggest success story of the BRICs, presents a particularly profitable growth opportunity for investors.”
He continues: “The market suffered a slump recently, but now the sector is making a recovery as India’s economy stands firm amongst other emerging markets and large economies.
“The country’s real estate market has proven that it’s able to accommodate global, regional and local economic dynamics. With the relaxation of rules on foreign direct investments, there has been no better time to invest in the Indian property market.”
This new-found transparency and relaxation of FDI rules is expected to deliver more capital into real estate and ease the way of doing business in India. The Indian real estate market is projected to reach US$180 billion by 2020 and all signs point to a market boom under Prime Minister, Narendra Modi’s leadership.
Foreign investment in Indian real estate is very strong and is seeing a significant rise for the first time in almost five years. US companies alone have made $15 billion worth of FDI in India in the past 18 months alone and are expected to invest another $27 billion this financial year.
Furthermore, India’s economic growth has led to an abundance of employment opportunities, and top-level incomes are at a record high. As a result, India is one of the fastest growing countries for high-net-worth individuals (HNIs), which is good news for the luxury real estate sector as HNIs are increasingly investing in luxury residences. India’s wealthy young professionals are looking for homes to match their affluent lifestyles, with an increased focus on bespoke design.
“India’s economic growth is having a positive effect on our real estate market,” continues Ohri. “We expect that sales will dramatically increase as India’s strong economic position will look more attractive to investors.
“2016 is expected to be a year of solid growth for the real estate sector in India. There will be more employment opportunities and disposable income, which should translate into demand for housing across various segments.
“2015 saw the highest inflow of private equity funds. It is estimated that investment grew by more than 72 percent and was pegged at 256.83 billion Indian rupees. Credibility of the developer, infrastructure and location are the prime considerations for buyers. In a given location, luxury properties offered by reputed and trusted developers tend to appreciate more.”
Demand for luxury real estate is likely to remain strong in 2016. This is why developers are launching projects with world-class designs and amenities. These include apartments, penthouses, villas and bungalows in gated communities and branded residences. Key luxury housing markets, such as Mumbai and Delhi, have witnessed a steady appreciation of between 10 percent and 12 percent over the past few quarters.
India appears to be a solid investment, and the last BRIC standing.
