Indian Property Investments Up 85 Per Cent

Indian property investment saw a rise of 85 per cent over the first nine months of 2017, when compared to the same period in 2016.

The volume of property deals reached 2.6 billion US dollars from January to September 2017, compared to just 1.4 billion US dollars the previous year, according to a report by Colliers International.

Although the country lags other nations in Asia, especially considering its size, there are real signs that the Indian property market is starting to mature as an investment market.

The third quarter of 2017 in particular, saw the Indian property market showing growth of 515 per cent to 1.2 billion US dollars, albeit from a very low comparison base.

Suresh Castellino, Executive National Director, Capital Markets and Investment Services, Colliers International India, commented: ‘The increase in deal volume is a testimony of the fact that India is a maturing market, with high-value creation potential for its investors. Also, it endorses that there is immense growth potential in commercial, industrial and warehousing industry as most of this capital has been employed in these sectors.’

The report found that India has higher benchmark interest rates compared to other countries in Asia, though this could be beginning to change.

Following the cut to the repo rate by Reserve Bank of India, benchmark interest rates have fallen to 6.4 per cent. Most economic forecasters, expect the Reserve Bank of India to keep interest rates unchanged in the coming months, although, few expect further rate cuts.

Surabhi Arora, Senior Associate Director, Research, Colliers International India, commented: ‘Various economic forecasts expect CPI inflation to move back above 5 percent in the first half of 2018, and remain constant. If so, then real interest rates should stay below about 1.6 percent over next years, compared to a range of about 3.0-4.3 percent, over the first three quarters of 2017. This loosening of real monetary conditions ought to support capital values in our maturing investment property market.’

It seems that the Indian property market, the sleeping giant of Asia, could be about to wake up in 2018. Overseas property investors take note.