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affordable housing in india looking like a good investment

News Posted On: 14 January 2011

Residential property prices in India fell by 25 to 30% from their previous highs in 2008 but have now recovered well.

While it is estimated that there is not much room for price increases in the high-end market, demand for affordable housing is far greater than availability, especially in the cities of Mumbai and New Delhi. This is because of the growing population in the cities and their increasing wealth which will lead to many of them becoming first time home owners.

Mumbai in particular is one of the most expensive cities in the entire country and there is a massive demand for housing which has led to a rise in rental demand and therefore rental income. India's mortgage market is still growing and lends conservatively although the increasing wealth of individuals may change this in time.

Further impetus for investors looking towards this country will come from a recent study by PricewaterhouseCoopers showing Mumbai and New Delhi as being among the top five destinations for investing in the Asia Pacific region. They also forecast that India will enjoy a GDP growth of 9 or 10% by 2015. This is quite impressive as the Asia-Pacific region has been particularly strong recently.

Other economists have forecast that growth this year will be 8.4%, rising to 8.7 is percent next year. The Indian government is also working hard to reduce its fiscal deficit. India's inclusion in BRICS is a further indication of its growing economic power as it is estimated India's growth rate will be higher than China's and will overtake Japan by 2032.

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