India’s Property Market Attracts Wealthy Developers

Why Donald Trump Is Heading For Bombay

Date 22/07/2008

Profit Hunter

Manraaj Singh

India is producing new millionaires faster than any Asian country other than Singapore.

The new rich are demanding more of everything. More cars, televisions, education, housing...

And they don’t just want more, they want it better too.

Companies that can deliver what India’s booming nouveau riche class want are set for bumper times. And we’re now zeroing-in on a way of playing this boom.

The incredible Indian money machine

The number of Indians with more than $1 million in financial assets shot-up by 23% last year. That trumped China’s 20% and Brazil’s 19%.

That’s the second fastest growth rate in Asia after Singapore.

You can’t really compare the two though. Singapore attracts international professionals from around the world to its service industries. India’s millionaires are home-grown.

In fact, India now has about one hundred thousand dollar millionaires.

It’s not just India’s millionaires who are enjoying good times either

To get an idea of how quickly Indians have been getting richer, just consider this:

It now takes just 4.9 years of salaried employment to buy an apartment in suburban Bombay. In 1995 it took 22 years. And that’s despite the crazy boom in property prices in the city. House prices in south Bombay have doubled in the past two years. And the city now has the second-priciest offices in the world after London.

India's property sector was worth about $12 billion last year. But that is expected to grow to $90 billion by 2015. A 650% gain in 8 years.

Donald Trump heads for Bombay

With that sort of potential, India’s property market is now attracting some of the biggest international players.

Dubai’s Damac Properties plans to invest $5 billion in projects over the next three years. The Middle East’s biggest property company, Emaar, also plans on entering the market in a big way.

And now Donald Trump’s Trump Organization plans to set-up a $1 billion fund to invest in Indian property.

But we aren’t rushing to get in

You may remember that last Wednesday I mentioned that property companies have been the worst-performing Indian AIM-listed shares.

And there could still be more pain ahead in the near-term. Indian property prices have been risen for the last five years. The entire sector now looks set for a correction.

In fact, the Bombay Stock Exchange Realty Index has fallen by 63% this year. That’s almost double the 32% drop in the benchmark Sensex share index.

And there is probably more pain to come as well. You see, analysts are forecasting that Indian property prices could fall by about 20 - 25% over the near term.

As a long-term growth story, India’s property market is a developer’s dream. The country has 1.1 billion people who are getting richer by the day.

Falling property prices and rising incomes are fantastic combination for ordinary Indians. It’s going to give more of them a chance to get onto the property ladder. But that’s a longer term story.

For now though, India’s property companies are probably set for more short-term pain.

There are still plenty of profit opportunities in India

But India is throwing-up some fantastic investment opportunities right now as well. In fact, I’m now looking at two particular Indian companies.

They’re both very impressive. But one of them is definitely beginning to look like the stronger bet. I’ll be updating Profit Hunter readers on that opportunity very soon.

Here’s another fantastic Asian profit opportunity that we’ve uncovered...

India’s rapid development is hugely impressive. But it isn’t the only Asian country that offers potentially massive return on your investment right now.

To find out more about the little Asian country that has been dubbed "the New China", just click here.

Regards,

Manraaj Singh
Editor
Profit Hunter P.S. If you enjoyed this article then we encourage you to sign up for Profit Hunter. Track down exciting opportunities in the worlds’ emerging markets and always stay ahead of the curve.

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