Professional Documents
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PROJECT REPORT
ON
GUIDED BY:
MS. HETAL D. TANDEL
(LECTURER, NLCCM, NAVSARI)
NARANLALA
COLLEGE OF COMMERCE & MANAGEMENT
NAVSARI – 396450
VEER NARMAD SOUTH GUJARAT UNIVERSITY, SURAT
YEAR- 2010-11
CERTIFICATE OF COMPANY
CERTIFICATE
This is to certify that the project report entitled, “Analysis of Real estate
Investment”, at Customer First financial Advisors Pvt. Ltd., Navsari, is submitted by
Mr. Ajay M. Gondaliya, TyBBA (Finance), Exam No. …………..
To the Naranlala College of Commerce And Management, Navsari in the partial
fulfillment of the requirement for the degree of Bachelor of Business Administration at
Veer Narmad South Gujarat University, Surat.
I, the undersigned, Mr. Ajay M. Gondaliya, declare that the project work
entitled “Analysis of Real Estate Investment”, is based on my work. This is an original
piece of work and references whenever taken have been duly acknowledged. No part
of the report has been copied and without reference.
I further declare that the information collected from the company has been
used only for academic purpose and has not been shared with anyone.
Navsari.
Date: - 31/3/2011
ACKNOWLEDGEMENT
Knowledge as an important tool that play important role in our daily life, however
is necessary to apply it on the right way and gain experience. The project work has
placed an important part to explore the practical work, to learn in detail apart from the
theoretical studies. Hence, such type of project work is valuable for the management
students of these days. I perceived this work as an opportunity to gain knowledge and
experience apart from study.
I am highly gratified to Mr. Hardik Naik & Mr. Vishal Merchant who permit me
to do the project work at C1 and provided me with useful knowledge. I am also
thankful to other personnel of the company who gave me valuable guidelines during
the course of preparation of this project report.
I am thankful to Dr. R. C. Gandhi, Director of Naranlala College of Commerce &
Mgt., Navsari and Ms. Hetal D. Tandel, my project guider for providing me valuable
guidelines during the preparation of this project report.
---------------------------------
Ajay M Gondaliya
(TYBBA)
SYNOPSIS
i Company certificate
ii Declaration
iii Acknowledgement
iv Synopsis
CHEP: 1 INTERODUCTION
4.1. History
4.2. What C1 offers…
CHEP: 5 THEORITICAL FRAMEWORK
If any work is to be carried out, it has its own some problems and
limitations. This project work is faced by the following major limitations:
1). For the preparation of this project report, it demand a quantum of time.
The limited time hassled in the completion of the project work.
2). The conclusions and finding derived here are as per my limited
understandings and knowledge.
3). There is lack of specific methods of calculation and proper statistical
tools.
4). The project report is largely based on the secondary data.
Research can be defined as the search for knowledge, or systematic
investigation for the purpose of discovering, interpreting and concluding the subject.
The research work is carried out in order to find out solutions to the questions.
The research type undertaken in this project work is the Exploratory Research design.
It is a type of research conducted for deriving systematic solutions. It should draw
definitive conclusions. This research often relies on secondary research such as
reviewing available literature and data, or qualitative approaches such as informal
discussion.
Preparing the project report comprises the process of collecting and analyses
data. The report is prepared on the base of two types of data, primary data and
secondary data.
Primary Data:
Primary data are those data that are collected by research. Such data are already
exists. I have collected such kind of data by asking questions and queries to the
managers, personnel and employees of the company. Such data are recorded in the
books.
Secondary Data:
The project report is largely comprises the secondary type of data collection.
Such type of data are already exists that are collected previously by others. The sources
of secondary data are newspaper, magazine, websites, books, etc.
Real estate sector in India is witnessing tremendous boom. Real estate industry in
India is presently worth $12 billion and is growing at the rate of 30 per cent per annum.
The importance of real estate sector in India can be gauged from the fact that it is the
second largest employer next only to agriculture. The real estate industry has
significant linkages with several other sectors of the economy and over 250 associated
industries.
Indian real sector has seen an unprecedented boom in the last few years. This
was ignited and fueled by two main forces. First, the expanding industrial sector has
created a surge in demand for office-buildings and dwellings. The industrial sector
grew at the rate of 10.8 percent in 2006-07 out of which a growth of 11.8 percent was
seen by the manufacturing sector. Second, the liberalization policies of government
have decreased the need for permissions and licenses before taking up mega
construction projects. Opening the doors to foreign investments is a further step in this
direction. The government has allowed FDI in the real estate sector since 2002. FDI
was deemed necessary in the view of making the sector more organized and increasing
professionalism farmers. The villages adjacent to the metro cities have experienced
sky-rocketing land prices. This has induced farmers to sell their land for good money.
Eighty percent share of the real estate market is garnered by residential sector
and the rest is comprised of offices, shopping malls, hotels and hospitals.
Real estate companies are coming up with various residential and commercial projects
to fulfill the demand for residential and office properties in Tier-II and Tier-III cities.
An estimated shortage of 26.53 million houses during the Eleventh Five Year Plan
(2007-12) provides a big investment opportunity.
→ in the year 2009-10 the total constructions sector size was Rs. 488,345 caror as per
The Central Statistical Organization.
The company has range of financial services to cater the customer’s requirements. The
major services are:
product
Mf pms
Equity
pms
Real
estate
pms
C1 OFFICES:
Head office: Vishwakarma Arcade, Majura Gate, Surat-05.
Corporate office: Opp. Seth R. J. J. Highschool, Junathana,
Navsari-396445.
Branch Offices: Bardoli, Vyara, Vapi, Gandevi, Valsad, Billimora, chikhli,
Ankleshwar, Ahmedabad.
.
What is Investment...
Investment comes with the risk of loss of the invested sum of money. The
investment that has not been thoroughly analyzed can be highly risky with respect
to the investment owner because the possibility of losing money is not within the
owner’s control. The above listed all the investment instruments possesses less or
more chances of risk.
5.1 Classification of Properties:
Types of
Property
(B).
(A). Residential (C). Vacant
Commercial
Property land
property
• For staying
• As an investment
Commercial real estate property types include duplex homes, and other construction
for habitation by multiple family groups. Condominiums are frequently called multi-
family because of their construction as a group, but are normally listed and sold as
single family residential units. Duplex homes are also frequently listed and sold as
residential units to a buyer that lives in one side and rents out the other.
2. Retail Space Real Estate Properties:
This category would include single buildings used as stores for clothing, electronics
and other consumer products, as well as malls, strip centers and the like. Restaurant
spaces are a specialty subset of the retail category, with some listings shown as
restaurant/retail. Valuations can be based on size and land value, retail sales per square
foot or other investment return calculations.
A single building designed for office use, or a group of offices in a single building or
cluster of buildings would fall into this category. When offices are grouped in
structures with single ownership, they are listed as commercial office rental property.
The owner derives income from the rental payments of the office tenants. These can be
valued based on the rental income return on investment, rather than methods using
square footage and land value. Medical & Dental offices are a subset.
Land Investment has historically been the forte of large development companies,
rich farmers or wealthy individuals. It can be a profitable business if proper
development of land is undertaken. Land Investment is referred to as a long term
investment and with land prices on the rise in many parts of the world, it is said to be
the safest and smartest way of investing ones money.
Capital gains can easily be realized from land when land price increases. The
most striking feature of land investment is that investment takes place in a tangible
asset which the investors can readily put into use. It is a branch of real estate
investment which is gaining ground as major part of capital budgeting analysis. Real
estate is basically defined as immovable property such as land and everything
permanently attached to it like buildings. It is essentially at this juncture that land as an
asset differs from real estate as it does not necessarily includes buildings and the
attachments to the land.
Land is perhaps the most basic asset that we want to invest in and may include vast
open tracts with no significant estate on it. The job of developing the land lies with the
developer, and with proper care to include modern houses and the associated
amenities, it will significantly appreciate its value. Land situated close to developed
areas will cost more as opposed to those in less developed areas. Land developed for
commercial purposes and those developed for building residential complexes will have
different prices and tax implications, if any.
Investing in land can be profitable as there is limited supply of land and the purchaser
can really sell dear if he wants to.
5.2 CHARACTERISTICS OF REAL ESTATE INVESTMENT:
Real estate properties have its own some important features. Some of the
characteristics that make real estate unique as compared to other investment
alternatives are as follows:
(1). Tangible:
Real estate is, well, real! You can visit your investment, speak with your tenants, and
show it off to your family and friends. You can see it and touch it. A result of this
attribute is that you have a certain degree of physical control over the investment - if
something is wrong with it, you can try fixing it. You can't do that with a stock or
bond.
(2). Requires Management:
Because real estate is tangible, it needs to be managed in a hands-on manner. Tenant
complaints must be addressed. Landscaping must be handled. And, when the building
starts to age, it needs to be renovated.
(3). Inefficient Markets:
An inefficient market is not necessarily a bad thing. It just means that information
irregularity exists among participants in the market, allowing greater profits to be made
by those with special information, expertise or resources. In contrast, public stock
markets are much more efficient - information is efficiently dispersed among market
participants, and those with material non-public information are not permitted to trade
upon the information. In the real estate markets, information is king, and can allow an
investor to see profit opportunities that might otherwise not have presented themselves.
(4). High Transaction costs:
Private market real estate has high purchase costs and sale costs. On purchases, there
are real-estate-agent related commissions, lawyers' fees, engineers' fees and many other
costs that can raise the effective purchase price well beyond the price the seller will
actually receive. On sales, a substantial brokerage fee is usually required for the
property to be properly exposed to the market. Because of the high costs of “trading”
real estate, longer holding periods are common and speculative trading is rarer than for
stocks.
(5). Lower Liquidity:
With the exception of real estate securities, no public exchange exists for the trading of
real estate. This makes real estate more difficult to sell because deals must be privately
brokered. There can be a substantial lag between the time you decide to sell a property
and when it actually is sold - usually a couple months at least.
(6). Underlying resident Quality:
When assessing an income-producing property, an important consideration is the
quality of the underlying residence. This is important because when you purchase the
property, you're buying two things: the physical real estate, and the income stream
from the tenants. If the tenants are likely to default on their monthly obligation, the risk
of the investment is greater.
(7). Variability among Regions:
While it sounds cliché, location is one of the important aspects of real estate
investments; a piece of real estate can perform very differently among countries,
regions, cities and even within the same city. These regional differences need to be
considered when making an investment, because your selection of which market to
invest in has as large an impact on your eventual returns as your choice of property
within the market.
When it comes to making money, Real estate is considered to be one of the surest
investments. Lots of opportunities abound, whether it be in the stock market or in
business. But these areas also offer a significant amount of risk. As a result, most
people do not engage in these speculative activities. But real estate is something which
more people can be involved in, simply because everyone needs a home to live in.
However, no investment is entirely risk free, and so even here a certain amount of due
diligence is required.
Some important point you need to think about:
1. Who is the developer?
2. Is the project a self development / partnership or joint venture?
3. Past business / trading history
4. The location of the proposed project
5. Basic amenities
6. The growth prospects of the neighborhood development
7. Industrial and business development in the locality
8. Price comparison analysis
9. Future property price valuation
10. What are the returns on your investment?
Affordability is a key consideration when making any purchase. One should factor
additional expenses such as electricity and property taxes to get a complete idea of how
much can be afforded.
1. Market study:
Market study refers to detailed analysis of market and locations in
different regions within the specific area. One has to look the trend and path of the
property market in the area where he want to set up the project. A marketability study
tries to create a market area demand model based on available demographic information
and the application of common sense to develop a picture of the current and future
market area trends that may effect demand.
2. Feasibility Study:
Feasibility Study typically involves testing geographic locations for
a real estate development project, and usually involves packages of real estate land.
Developers often conduct feasibility studies to determine the best location within a
jurisdiction, and to test alternative land uses for given packages. Jurisdictions often
require developers to complete feasibility studies before they will approve a permit
application for retail, commercial, industrial, manufacturing, housing, office or
mixed-use project. Market Feasibility takes into account the importance of the
business in the selected area. Could the project be built?, Can the site support a
building structure that is planned?, etc. should be check out.
3. Property Identification:
Property identification refers to the type of project which the builder has to
plan. It mean whether put residential or row house or to put specific commercial project
looking at the locations and demand for the market. Property identification generally is
driven by demand of type of property in the market.
5. Property Acquisition:
Generally, property acquisition refers to a person or other entity acquiring
title to real property by a deed. A deed is the legal instrument used to transfer
ownership in real estate. Real property can also be acquired by inheritance and by a
court order.
7. Budgeting:
This point is also important to be considered by a builder. The budget of
the real estate project should be optimal as per the plan and designs of the structure.
Budgeting needs to analyze the size of the projects.
8. Regulatory Approval:
After the plans and design of the projects, it needs to be submitted the
same at the concerned govt. authority (Municipal Corp./Municipality) for further
verifications and approval for the project. If authority finds no objections, then after
they can arrive at decision for approval and sanction of project.
9. Project Mgt./Construction:
If government regulatory approvals and project get sanctioned by
authority, then after builder can take step further to start initial work of
construction. A project management team also has to form for various aspects of the
project of residential or commercial. At regular interval of time, govt. executives
checks the work whether is going as per the criteria.
10.Marketing Plan:
While developer put the marketing plan for the project he has put. On the
bases of demand for the housing and location. As a promotional efforts and
marketing for the project Hoardings, newspaper ads. attractive schemes, agent/
broker approach has to be followed.
Below are some of the main points that were made along the way:
•Real estate investments fall into one of the four following categories: private equity,
public equity, private debt and public debt. Your choice of which one to invest in
depends on the type of exposure you are seeking for your portfolio.
•Real estate is tangible, so it requires ongoing management. On the other hand, you
also have an increased ability to influence the performance of a single investment as
compared to other asset classes.
•Some of the benefits of adding real estate to a portfolio include: diversification, yield
enhancement, risk reduction and inflation-hedging capabilities. However, real estate
also has high transaction costs, can be difficult to acquire and it is challenging to
measure its relative performance.
•Buying real estate requires substantial due diligence to ensure that you're getting what
you expect after you close.
•The way to determine the value of your property (other than actually selling it) is to
have it appraised by an accredited appraiser.
ADVANTAGES:
Investing in real estate is as advantageous and as attractive as investing in stock
market. Here are the main benefits of investing in property market.
► Real Estate Investments are Less Risky:
As compared to other investments, less of misadventure is involved in a real estate
property.. Real estate investments are traditionally considered a stable and rich gainer,
provided if one takes it seriously and with full sagacity. The reasons for the real estate
investments becoming less risky adventure primarily relate to various socio-economic
factors, location, market behavior, the population density of an area; mortgage interest
rates stability; good history of land appreciation, less of inflation and many more.
► Low Inflation
Inflation is the rise in the prices of the products, commodities and services, or putting it
another way, it is the decrease in your capacity to buy or hire the services. Supposing, a
commodity was worth $10 a decade back, will now cost $ 100 as the result of inflation.
Comparatively, real estate sector has minimum rate of inflation.
► Tax Exemptions
You get various tax exemptions on your principal and investment income
property. The tax exemptions available in real estate property investment are more than
available in any other investment. In other investments, you lose terribly on the
investments in your bank in the form of inflation and high taxes therein, but in real
estate; you don't actually have such hindrances.
There are several beneficial provisions in the Income-tax Act, 1961 which
promote investment in residential properties, having regard to the need for housing
millions of citizens. Of course, only those who pay taxes can take advantage of the
appropriate incentives given under the law.
Interest payable on loans taken for purchase or construction of house is deductible to
the extent of Rs 1.5 lakh every year, though the annual value of one self-occupied
residential property is exempt from income-tax. In addition, repayment of the
installment of housing loan is deductible to the extent of Rs 1 lakh per annum under
section 18-C.
► High Return on Investments
Real estate investment gives you potentially high Rate of investment before and after
the taxes levied on your income. In fact, investing in real estate gives you high ROIs
after the taxes
► Net Positive and High Income is Generated.
► Increased demand for properties.
DISADVANTAGES
Beside the large potential of return on Investments, there are certain levels of
Disadvantages. These disadvantages can be easily taken off, if you have an insight
about the limitations of real estate investment and what can be its short term as well as
long-term repercussions.
► Taking Wrong Decisions
People going for the real estate investment property take decisions in haste. Make a
firm decision when you go for purchasing your first real estate property, is just not
easy man. If you are swayed by emotions, you will be ruined.
With your real estate investment, you need to know one thing straight, and
that is you simply cannot aspire hard cash immediately. You have to wait and watch
the market movements and other socio-economic and politico economic factors before
selling your real estate property, like a mall or your home.
Real estate investment can get you real fatigue. It is a lethargic time consuming process
that makes you feel almost laid back. You need to plan and have those instincts to get
going with your property. You will learn more on about making you real estate
investments more time efficient in later part of the chapters.
Investing in a real estate property can be a risky and costly even, if you are not
prepared before, you will make losses. Not just losses but, but you will become a
pauper. Remember, as I said in my earlier statements, Real estate market is speculative.
► No Stringent Comparison Methodologies
Real estate market is variable. The price of two real estate properties can vary
a great deal, provided you keep other factors such as time and location, constant. No
two real estate properties can have exact. There always exists kind of variation and this
need to be taken into account. Though, you do have the existing rule of thumbs and set
strategies, but all these are workable, if tried in combination.
Micr Macr
o Real Estate o
Micro factors;
There are certain Micro factor that influences the property market
and its aspects. Suppliers, Cost of materials, firm’s competitors and also marketing
intermediary are the major elements that have effect on property business.
Macro Factors:
Factors like political, legal, social, global and demographic are the
Macro environment with generally influences reeal estate industry in large scale.
5.6 Government regulations in Real Estate sector:
Much of the over 100 laws governing various aspects of real estate in India dates
back to the 19th century and major amendments to existing laws are required to make
them relevant to modern day requirements. The Central laws governing real estate
include:
The purpose of this Act is the conservation of evidence, assurances, title, and
publication of documents and prevention of fraud. It details the formalities for
registering an instrument. Instruments which it is mandatory to register include:
(d) Leases of immovable property from year to year, or for any term exceeding one
year, or reserving a yearly rent.
Property Tax:
Property tax is a levy charged by the municipal authorities for the upkeep of
basic civic services in the city. In India it is the owners of property who are liable for
the payment of municipal taxes whereas in countries like the United Kingdom, the
occupier is liable. Generally, the property tax is levied on the basis of reasonable rent
at which the property might be let from year to year. The reasonable rent can be actual
rent if it is found to be fair and reasonable. In the case of un-let proper-ties, the rental
value is to be estimated on the basis of letting rates in the locality.
6.1 FINDING REAL ESTATE VALUES:
It is the practice of knowing the market value of a property. As all properties differ
from each other in terms of location area, etc. so their value is different. Basic
amenities of the area and surrounding environment are the factors playing an integral
role in the valuation of the property. Real estate returns are generated in two ways.
First, the income return comes from tenants' rent payments. The income return is a
straightforward calculation because all you need to know is how much cash remains
after all property expenses have been paid. The second type of return is the capital
return, which is the increase or decrease in the value of the property due to changes in
market demand and/or inflation. The capital return is more difficult to calculate, and
requires the property to be valued or appraised.
If you want to determine the value of a real estate investment, the most accurate
method is to sell the property and see how much money you get for it.
Appraisal method:
Appraisers use a variety of methods to determine value, and for income-producing
properties the most common method is the capitalization rate approach. In its simplest
form, a capitalization rate equals the net income from a property divided by its
purchase price. To use the capitalization rate approach, an appraiser gathers
capitalization rates from actual sales of similar properties, and based on those sales and
capitalization rates forms a judgment on the appropriate capitalization rate for the
property being valued. The appraiser then applies that capitalization rate to the subject
property's income to estimate the value. For example, if the market-derived
capitalization rate for a property is 10%, and the net income for that subject property is
$100,000 in the year after you purchase the property, then the value of the property is
$1,000,000.
-- Operating Cash Sales price Total Cash Flows
Year 1 100,000 n/a 100,000
Year 2 105,000 n/a 105,000
Year 3 110,250 n/a 110,250
Year 4 115,763 n/a 121,551
Year 5 121,551 10,00,000 1,121,551
Mortgage Financing:
8% 6.80%
% growth rate 5.90%
6%
4% 3%
2%
0%
2003- 2004- 2005- 2006- 2007- 2008- 2009-
04 05 06 07 08 09 10
Year
At present, the real estate and construction sectors are playing a crucial role in
the overall development of India’s core infrastructure. The real estate industry’s
growth is linked to developments in the retail, hospitality and entertainment(hotels,
resorts, cinema theatres) industries, economic services (hospitals, schools) and
information technology (IT)-enabled services (like call centers) etc and vice versa.
Realty market is just not trendy among Indians, but has also gained popularity among
foreigners. Morgan Stanly – one of the world’s best banks has of late invested about
$152 million Mumbai real estate. The presented report also stated that this is the only
biggest investment in India’s booming real estate sector. This proves that India real
estate is improving in reality. Further more states that foreign investors have immense
interest investing in real estate India. Due to the demand of residential and commercial
real estate among NRI’s has pushed the price of real estate beyond actual limit.
The market was not in an initial stage at the time of 1991. The industry was more
focused in only two centre Bombay and Delhi. Those years didn’t find construction
activities on large scale as the industry is today. The residential as well as retail sector
was not as healthy as we experiencing today. There were hardly construction of retail
malls and complexes, also the concepts of integrated townships, high-rise complexes,
and row hoses schemes were not introduced at this stage. People were found generally
unaware of investment opportunities in real estate it was because of negligible return
on their investment. Also real estate index was not indicated at Stock exchange. The
Tier II and III cities were far away from the property concerns, very slow pace of
development were taking around such cities. Hence, the Real estate industry couldn’t
take place at these times. The price of property was quite low as compared to today’s
situation, it was because was the less number of dealings and transactions regarding
property.
It has been observed since the last few years that end-user buying in the sector has
increased from 35 percent to more than 60 percent. There are many obvious reasons for
this improvement. First, the advent of the IT sector has made job in the cities a highly
common phenomenon. This has induced office workers to migrate to cities.
The table below depicts the growth of different sectors that have contributed heavily to
the real estate growth in India.
Sector CAGR (Compound Annual Growth
Rate)
Organized Retail 49.53
IT and ITES 28
Overall Housing 30
Real Estate 33
India is a growing economy and has witnessed a growth of 8.1% in the last financial
year. Therefore, the investors are eying on Indian property and willing to invest at this
right time to reap huge profits.
· The focus of Property market shifts to Tier II and Tier III cities, rather than only
concentrating on only Metro cities like Mumbai and Delhi. Smaller cities middle
class house holds increasing more rapidly than of metro cities. So there is a tremendous
boom in smaller cities.
· There is a great demand for office and industrial space of 100 million square feet to
accommodate an estimated 2 million new graduated passing out from various Indian
universities recently.
The following chart depicts the rate of property in the particular year, and indicates the
trend of market.
Increase in Property Rate in tier cities
· There is a huge demand for corporate space of a large number of Fortune 500 and
other multinational companies who are willing to set up offices in India.
· India is witnessing growth in other sectors like auto ancillary, chemical, healthcare,
pharmaceutical, jewellery that lead to huge demand in this space as well.
Presently the commercial banks and other finance landing institutions are also
started playing an important role in the development and growth of the Property
Market. Easy availability and governmental incentives have boost in the reality boom.
At present the market leader in the India mortgage market is the Housing Development
Finance Corporation (HDFC), the State Bank of India (SBI), ICICI and other banks
proving home loans to the customers. At present the total worth of the India Mortgage
Market is nearly US $ 18 billion. The present home loan rate is 8.5% p.a.
Till December 31 last year, the SBI was offering teaser loans where the interest rate
was 8% for the first year, 9% for the second and third years, and a floating rate
thereafter. As on that date, the total outstanding retail home loans stood at Rs82,376
crore for the bank.
The three major financial institutions HDFC, ICICI and Corporation bank had
provided home loans. According to CARG report, the total size of Home loan market
in India is Rs.150,000 caror as in year 2010.
Year Total Loan Disbursed (in Cr.)
1991-00 9812.03
2000-2001 12637.85
2001-2002 14744.85
2002-2003 33840.53
2005-2006 56,600
20%
80
% Residential
Commercial
(source: CREDAI)
Of the total investments done in properties, about 20% investment was in Commercial
segment and about 80% of investment was in Residential segment.
→The residential housing development contributes to 80% of the real estate in India.
• Highly industrialized state, with more than 38% GDP contributed by secondary
sector.
• Creating value for investors, ranked as the best state for investment approved by
financial institutions.
• Top contributor to Indian economy, around 22% of the Indian exports contributed
by Gujarat
• An economy on the boom and beating recession, more than 10% since 2004
DMIC
• Some Mega Projects proposed to com up at Gujarat, will boost the real estate
investments, and largely affect the market:
1) Special Investment Region (SIR, Dholera)
2) Delhi Mumbai Industrial Corridor (DMIC)
3) Special Economic Zones (SEZs)
The Ministry of housing in 2006 to assess the urban housing shortage has estimated
that at the end of the 10th Five Year Plan, the total housing shortage in the
country was 26.53 million.
30.1
25 26.7 26
20
19.7
URBAN
15 RURAL
21.7
10 15.1 18.4 19.3 20.5
(in m illon)
5
0
2001 2005 2008 2010 2014
(Source : CRISIL Research)
Real Estate Sector in Gujarat. Trend in Property market
Gujarat is one o f the most growth oriented state in India. And Ahmedabad
and Surat are the most happening cities in the state. The transformation of these cities
into Metros” is fast and benefiting to all. The prices o f properties in Ahmedabad and
Surat are at new high. The cities were almost unknown just before few years now they
have become most popular. Both the cities are growing in terms o f finance and
developing even as career hubs. Simultaneously Number of new, national and
multinational Companies are ready to invest in these cities as they have seen a bright
future in business opportunities. There were times when people wanted to invest in
other cities than Ahmedabad and Surat. But the scenario has been improved. Now a
day’s people have started investing in these two cities as they look at them as places of
new growth.
Gujarat is one of the most growth oriented state in India. The prices
of properties in Ahmedabad and Surat are at new high. The cities were almost
unknown just before few years, now they have become most popular. Both the cities
are growing in terms of finance and developing even as career hubs. Simultaneously
Number of new businesses, national and multinational companies is ready to invest in
these cities as they have seen a bright future in business opportunities. There were
times when people wanted to invest in other cities than Ahmedabad and Surat. But the
scenario has been improved. Now a day's people have started investing in these two
cities as they look at them as places of new growth.
While Ahmedabad is the historical city of Gujarat with a rich heritage, Surat
is the clean and green city or the port city of Gujarat. Total population of larger
Ahmedabad is approximately 5.5million people. Surat too has the population about
4.9million. Surat is being the fastest growing city of India now textile and diamond
business have bright future. Other than these two industries, lot more industries are
growing up very fast in these cities. So there is no doubt that demand for housing will
increase by leaps and bounds. All working class people will need residence/apartments.
So investment in residential projects in these two cities will bring huge profit to
housing companies or the builders. Housing sector is the most preferred segment in
Surat and Ahmedabad. Well known builders and popular property developers who
were not interested in building small houses and apartments are now coming up with
all kinds of affordable and luxury homes to buyers from all class. Though industrial
sector of both the cities are quite well established, the expansion and business with a
new vision is going in full speed. As life has become fast and modern, the new
generation needs something novel. So for their recreation and entertainment new malls,
multiplexes and retail outlets are opening up daily across the cities.
Further people invested in gold and silver or in stock market. But as these markets
are as always uncertain smart people will prefer to invest in Real estate. So a common
trend among affluent Gujaratis is to invest in a property which will rise soon. In real
estate there is minimum risk of cost cutting and they are growing at rapid speed. So
many projects are up coming too that will attract higher middle class people to middle
class people. Investors from other affluent cities have also seen a great opportunity and
flocked in to these cities with their profits.
BOOKS:
• Investment Analysis & Portfolio Management- 2nd Edition Prashana Chandra .
Tata Mcgrill Publication , New Delhi.
WEB REFERENCICES:
• http://www.investopedia.com
• http://www.indianground.com
• http://www.economywatch.com
• http://www.realestateindia.com
• http://www.siracusaco.com/