The factors such as booming economy, favourable demographics and liberalised foreign direct investment (FDI) regime, the Indian real estate sector has witnessed a revolution. The real estate in India is growing at 35 per cent. This sector is estimated to be worth US$ 15 billion and anticipated to grow at the rate of 30 per cent annually in the coming decade. India has become a new market for foreign investors due to its potential economical growth rate. As a matter of fact, this sector is attracting foreign investments worth US$ 30 billion in number of IT parks, hotels, medical, telecom and residential townships which are being constructed across India.

Real estate in India is the second largest employing sector including construction and facilities management. This sector is linked to about 250 supportive industries such as cement, brick, transport, steel, etc through backward and forward linkages. Accordingly, a unit increase in expenditure has a multiplier effect in this sector, as capacity to generate income is as high as five times.

Rising income levels of a growing middle class is the main reason for growth in the real estate. Apart from the income, other factors such as increase in nuclear families, low interest rates, modern attitudes to home ownership and a change of attitude amongst the young working population are responsible for real estate development. Therefore, it can be said that real estate property have changed the attitude from ‘save and buy’ to ‘buy and repay’ to boost housing demand.

As per the information by ‘Housing Skyline of India 2007-08′, a research firm Indicus Analytics, it has predicted that there will be demand for over 24.3 million new dwellings for self-living in urban India by 2015. Moreover, rapid growth of the Indian economy has faced a cascading effect on demand for commercial property to meet the needs of business such as modern offices, warehouses, hotels and retail shopping centres.

With the significant investment opportunities emerging in this sector, international real estate players have entered in the country. Effective participation from large local and international industrialists have resulted in potential economical growth of India which is moving towards maturity. Currently, foreign direct investment or FDI inflow into this sector is estimated to be between US$ 5 – 5.50 billion. A unit of Deutsche Bank for instance, aims to invest more than US$ 1 billion over three years in Indian construction and real estate property projects. Russian conglomerate Sistema plans to develop hotel, offices and residential complexes in major cities of India with an initial investment of US$ 100-200 million.

The boom in this industry has attracted large number of realty funds to step into this market. Prominent global players such as Carlyle, Blackstone, Morgan Stanley, Trikona, Warbus Pincus, HSBC Financial Services, Americorp Ventures, Barclays and Citigroup among others have all already checked into the Indian realty market.

Among international players, the many Indian realtors are going global by making their name in the international market through significant investments in foreign markets. Prudential Real Estate Investors for instance, has acquired Round Hill Capital Partners Kabushiki Kaisha, a Japanese asset management firm. Embassy Group has settled a deal with the Serbian government to construct a US$ 600 million IT park in Serbia. Parsvnath Developers in collaboration with the Al-Hasan Group in Oman.

Importantly, government has introduced many innovative reform measures to discover the potential of the sector. 100 per cent FDI is allowed in realty projects through the automatic route, for instance. 51 per cent FDI permitted in single brand retail outlets and 100 per cent in cash and carry through the automatic route. With growing economy in India, the demand for all segments of the real estate sector are likely to continue.

Despite a recent slowdown, the U.S. real estate market continues to be a popular investment destination for foreign investors. Attracted by a desirable return on investment, many foreign nations continue to invest heavily in the U.S. residential and commercial real estate markets. In fact, in 2005, foreign investment in U.S. real estate reached 1.83 trillion.

To evaluate the impact of foreign investment on the U.S. real estate market, the National Association of Realtors (NAR) produced a 2006 report entitled ‘Foreign Investment in U.S. Real Estate: Current Trends and Historical Perspective.’ The report provides insights into the trends in foreign real estate investment, its impact on the U.S. economy, and the major countries that participate in U.S. real estate investment. Below are some highlights from the NAR report.

According to the U.S. Department of Commerce, the top seven countries that had significant holdings in U.S. real estate as of 2005 were:

Germany – 13 %

Latin America – 13 %

Australia – 11 %

Japan -10 %

United Kingdom – 10 %

Canada – 6 %

Netherlands – 6 %

The U.S. economy is wide open to foreign investors. Both investors and Americans significantly benefit from all this foreign investment. The NAR study estimates that without foreign investments in the securities market, the long-term lending rates would be four percentage points higher than the current rate, which would adversely impact the U.S. real estate market.

Foreign direct investment into the U.S. not only creates more jobs but also contributes to the demand for U.S. real estate. In fact, foreign investment may be responsible for creating two million U.S. jobs by the end of 2006, which further bolsters the demand for U.S. real estate.

Permanent and temporary immigration of foreign-born workers into the U.S. further bolsters the demand for real estate. According to the Joint Center for Housing Studies at Harvard University, 1.2 million net immigrants are expected to arrive in the United States annually. This immigration pattern is expected to offset the decrease in housing demand by post baby-boomer generations.

In summary, the impact of foreign investment and immigration into the U.S. will continue to play a major role in the U.S. real estate market.