| Among the factors, which contributed to the recent boom of the real estate sector in India, the cheap housing loan packages have been most significant. In earlier days it was not so easy to get a favorable housing loan package with an affordable interest rate and suitable loan terms. But nowadays with so many public and private institutions operating in Indian loan market, it has become very easy to get a loan package of your choice. So more and more people are now opting for housing loans to purchase their dream homes. The cheap loan packages played a key role in accelerating the growth of real estate sector in India and it is expected that they will continue to do so to maintain the growth momentum in future also. The disintegration of joint families and increased income level of the Indian middle class population also proved to be instrumental in fuelling the growth of real estate sector in India.
The booming real estate market in India contributed substantially in our country’s economic prosperity. It is mainly due to the all round development of our economy that India is now the second fastest growing economy of the world.
The real estate sector in India is characterized by its unorganized, fragmented existence with small players dominating the industry. Even a few years back, people had very little trust on developers due to their lack of transparency in operation and huge amount of unaccounted wealth. Lending to developers used to be regarded as risky. But now with so many competitors operating in the Indian real estate market, the builders sincerely try to increase their operational transparency and expertise. So it has been easier for them to have the necessary funds from housing finance companies and also from people, for their real estate projects. All these are fuelling the growth of real estate industry in India.
Real Estate Pricing
Residential properties are valued in square foot using mean and median price. The property market is divided into two equal parts by the median home price. One half of properties are valued below median and the remaining half above the median price. Due to the flourishing IT sector, the Indian real estate prices have exceeded the median home price.
Demand For Housing
Income of consumers, price of housing, cost of borrowing, availability of credit, consumers preferences, investors preferences, price of substitutes and compliments are the major determinants of the demand for housing.
Supply Of Housing
Availability of land, efficient builders, easy accessibility of credit and skilled labor determine the supply of housing.
The IT and IT-enabled service sectors have been the main driving force for the Indian real estate industry in 2005. The average demand for real estate from this sector turned out to be turned out to be around 25 million square feet in 2005 compared to the corresponding figure of 18 million square feet in 2004.
| 
