Tuesday 30 May 2017

Demand for Property in India is not just driven by IT Workers

Despite the anxious news about the countries IT industry, buying property in India is still a good investment. Many reputed individuals working with the media have over the past few weeks forecast that there would be a large number of layoffs in the countries tech sector. According to such experts, a large number of layoffs in the nation's IT sector would have a harmful impact on demand for the domestic real estate as well.


The IT Real Estate Connection

Much of the real estate in Indian cities is driven by demand from consumers who work in the IT sector. Sales of real estate in cities such as Bangalore, Hyderabad, Pune, Gurgaon, Noida, Chennai, Mumbai, and New Delhi are particularly sensitive to demand from IT workers. Nearly forty percent of the demand for real estate in the cities mentioned is driven by mid-level managers employed in the tech sector.

While the leaders of the largest technology company in India have stated that the outsourcing of jobs from India to overseas is unlikely to result in job losses, many others with less skin in the game are speaking in a different tone. According to the latter, the job losses in the technology sector are imminent and because many more people in India are employed as an indirect result of the tech sector than are employed within the tech sector itself, the impact of layoffs in IT will reverberate across the country.  

Is There Reason to Cheer?

According to reports received by this property site, 9 Indian cities have been counted among the top 300 cities globally where commerce is vibrant and growing. Unsurprisingly the top two ranked Indian cities are Mumbai and Delhi at 17th and 22nd positions respectively.
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The two of the highest ranked Indian cities together account for a Gross Domestic Product of 400 billion dollars. Both Mumbai and Delhi are the fifth and sixth largest cities in Asia when measured by the size of commercial activity. While this may sound impressive, when considering per capita income (income per person), the cities rapidly fall in global rankings. Global cities such as Shanghai, Seoul, and Beijing have per capita incomes that are, conservatively, three or four times greater than those of New Delhi and Mumbai.

Why All is not Gloom and Doom

However, the good news is that a credible international study has concluded that the largest cities in India are driven by more than just technology. There is a great deal of buying and selling taking place in all eight of the cities mentioned. According to some property sites, just because there are an unusually large number of layoffs in the tech industry, it should not lead us to the conclusion that the demand for real estate will fall drastically in the cities mentioned.


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