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Why invest in Indian real estate in 2020? It’s an historic opportunity

Indian Real Estate isn’t for everyone, but for those who do get involved, the opportunities are staggering. There are 1.3 billion people, and the country’s economy grew at 7% per year from 2010 to 2020. The country is still developing, the growth rates are expected to be high for decades to come. Put simply, there’s no other country that comes close to the potential that India has.

Major cities like Delhi, Mumbai and Bangalore are undergoing rapid transformation. Construction is everywhere – metro systems, highways and luxury properties are coming. International companies are beating down the door to get in – and take advantage of the highly educated workforce, and low costs.

All of these factors will boost the value of real estate in India. Investment in high quality Indian real estate has the potential to grow in value for decades to come. It’s an exciting time to be in India, and massive opportunities await!

I grew up in London, but spent time living in Mumbai as an adult. This gives me an outsider’s perspective. I think that the opportunities in Indian real estate investment are fantastic. In this article, I explain why investment in Indian Real Estate is an historic opportunity.

If you want to find out more about real estate in India, then I also recommend the below articles:


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Who can invest in Indian Real Estate?

The first thing to note is that not everyone can own Indian Real Estate. You’ll need to be an Indian citizen, an Indian Resident or an Overseas Citizen of India (OCI). The OCI scheme is a fantastic scheme for individuals with a family connection to India. To find out more about whether you’re allowed to buy property in India, I wrote this article with full details.

If you do decide to jump in and buy Indian Real Estate, then I have a service that may help. I provide an end-to-end service for foreigners that want to buy property in Mumbai. I invest in Mumbai property, and have a network of professionals that I work with on the ground. I can provide access to property deals, estate agents, solicitors and property managers. Set up a free call with me to find out more - full details are on this page.

And if you can’t invest directly in Indian property, then you don’t need to feel left out! You can still get exposure by investing in Mutual Funds.

Population Growth

The number one thing that supports real estate prices is population growth. More people means more demand for real estate, and higher prices. People will always need somewhere to live!

When it comes to population growth, India certainly leads by example! India has 1.3 billion people, and the growth rate is just above 1% per annum. This picture is mimicked in the major cities – Mumbai has 20 million people and is also growing at around 1% per year. That’s an extra 200,000 people coming to Mumbai every year. All of these people need to live somewhere, and these extra people are putting upward pressure on real estate prices. It’s a similar story in other major cities, like Delhi and Bangalore.

Foreign Companies moving in

Foreign companies are beating down the door to get into India – and this has been a real game changer for Real Estate Investment. For example, JPMorgan (the Investment Bank) had around 37,000 employees in India in 2018 – more than 10% of the global workforce. These 37,000 people are highly paid individuals who will demand high quality housing.

The reasons for foreign companies coming to India is clear. The country has massive pool of highly skilled, English speaking workers. When I was working at JPMorgan, the cost of an Indian employee was 1/3 of an employee in the US. If you want to find out more about my story, go to the About Me page!

JPMorgan isn’t alone. All of the major banks have a large presence in India, and are growing their numbers fast. As multinational corporations grow in India, they create hundreds of thousands of high paying jobs every year. More wealthy people has led to booming demand for high quality real estate.

New infrastructure

Have you been to India recently?! If you come to a major city, then you’ll see construction everywhere. Look up to the sky, and all you’ll see are cranes. There’s been a construction boom in India since 2000, and I don’t expect it to stop any time soon! The upgrading of India’s infrastructure has the potential to catapult it from a 3rd world country to a 1st world country in a generation. We’re half-way through this journey, and I expect the 2nd half to bring great opportunities in Indian real estate.

India is a long way behind the west in terms of infrastructure but they’re catching up fast. There are currently 13 metro systems across India being built. For example, the Mumbai Metro only has 1 active line as of 2020. However, they are currently constructing 14 other metro lines within the city. This will change the face of the city and fuel economic growth for decades to come.

Highways, flyovers and roads are being built everywhere, in order to upgrade the road system. Additionally, developers are building modern apartments to house all of the newly wealthy workers.

This development is frankly decades overdue, but it’s happening now - and it presents a major opportunity for real estate investors. Expect the improved infrastructure to boost real estate prices for decades to come.

Economic Growth

Economic growth provides massive support for real estate prices anywhere. As a country becomes richer, inflation increases the price of everything, including real estate. On this front, India is well ahead of any comparable country.

India’s economy grew at 7% per year from 2010 to 2020. For comparison, the UK grew at 1.9% per year and the US economy grew at 2.3% per year. There’s every reason to expect Indian Economic growth to rise at 7% per year for decades to come. As discussed above, there’s a large population of educated people and foreign money is flooding into the country.

Another great thing about India is that the majority of the population is young. In India the average age was 27 in 2018, this compared to 40 in the UK, 38 in the USA and 46 in Italy! This means that there are more young people to work and grow the economy, and less older people to support. Now is the time to invest in Indian real estate!

Democracy

One thing often mentioned about India, is that it’s the worlds largest democracy. The importance of this can’t be underestimated. China is the only country that’s larger than India, but it’s not a democracy.

With dictatorships and one party rule, there’s a massive danger of the Government confiscating your assets. And if they do, there is nothing you can do about it! In a democratic country like India, this isn’t a concern.

Conclusion

I truly believe that to Invest in Indian Real estate presents an historic opportunity. They have a highly educated population, fast economic growth and are in the middle of an infrastructure boom. I expect this to propel the economy for decades to come and turn it into a 1st world country. This will bring huge opportunities in the real estate market.

Put simply, there’s no country that comes close to this potential. People that invest in India real estate now, have the opportunity to become very wealthy.

So what do you think? Do you agree with my optimism about Indian real estate? Let we know in the comments below.

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