Capital inflow internally as well as through foreign direct investment (FDI) has propelled emerging markets like India to new highs. The boom in real estate India is primarily a direct result of this influx of capital.
Mere liberalization of RBI rules regarding FDI would not have created this flow. The need has been created first primarily through the increase in IT based MNCs establishing their base in India. Major cities like Bangalore, Chennai and Delhi have witnessed this. Main cities in Kerala like Thiruvananthapuram and Kochi have been part of this invasion.
The presence of the MNCs in these cities has increased the job opportunities of the young educated professionals. The remuneration of these IT professionals is much higher than the Indian average and this gives them a higher purchasing capacity.
The young, well-paid professional likes to spend on quality stuff and has the means to do so. After the usual shopping spree is over there is still enough money to go around. The desire to be set up well in life becomes strong and they start looking for that perfect address that declares to the world they have arrived.
Unfortunately, the demand for residential property far outweighs the availability in cities that are short on land. This has driven up the land prices and consequently the real estate industry as a whole is experiencing a hike in price.
Kerala Apartments and flats build by reputed builders get sold during the pre-launch period. The new generation market players see an ideal market to make their fortunes in this sector.
