Wednesday, January 10, 2007: Driven by economic growth, the real estate in India has really emerged as the hottest market to invest last year.  But, will it be apt to consider the same to happen in 2007? This is one of the questions that every potential investor as well as property developer is pondering?  As per industry soothsayers, there are seldom chances for the boom to strike again.

However, the growth will continue but at a slow pace of 10-15 per cent, while some areas will see a shoot up of near about 10-30 per cent in 2007. Development in the property market will be more in zone of finance than land. The big two: Initial Public Offering (IPO) and foreign direct investment (FDI). Following in footsteps of counterparts, most realty biggies are planning to raise around Rs 22,500 crore through IPOs this year, as per the data showcased by industry watchers.

One aspect that is expected to maintain its momentum is FDI flow which has also made a mark in the year 2006. $1 billion has already been parked in development projects. As for the current fiscal, there seems to be immense growth prospects awaiting property market.   Loan demographics and housing shortage will be the primary drivers of this sector. But profits and risks go hand in hand. “The lack of infrastructure is the key threat”, says Anshuman Magazine, MD, CB Richard Ellis South Asia. He also lays emphasis on dire need of bringing reforms into Indian real estate market.

Everything should be done in order like computerization of land records and other important data related to property. Stamp duty prices must come down to 4-5 per cent level in all states especially the major ones. All these reforms are likely to take place soon in Indian property market, though the pace depends on prevailing trends in different locations.

Rising cost of debt may influence the growth decisions of real estate developers, with interest rates heading north and RBI coming up with more stringent rules and regulations for banks lending to the sector.