Assetz® News - Indian confidence

Indian confidence

18th June 2008 |

Amid a world economy in which high inflation and the credit crunch have filled the financial headlines of late, many of those still keen to carry out some property investment will have been on the lookout for new opportunities, markets where the notion of economic slump is a distant one.

India certainly appears to be one of these. Although inflation is high at 8.24 per cent - prompting a recent interest rate rise from the central bank - economic confidence remains notably high. The Economic Times of India reported today that the country has come second in the Nielsen Global Online Consumer Survey table for consumer confidence, with only Norway ahead.

Explaining this, the survey concluded that optimisation and outsourcing are two key elements driving India's economy and enabling it and Norway to pursue economic policies that capitalise on decline elsewhere.

It stated: "Aside from consistently high consumer confidence, the two most optimistic nations in the world, Norway and India, share something in common: Their economies are benefiting from the by-products of economic slowdown."

So with India still booming, investors may be keen to see just how well the property market is doing out of all of this.

Andrew Fassnidge, managing director of independent property investment firm Navyroof.com, said the Indian property market can certainly offer something different and lucrative for investors.

He stated: "India is a great alternative for property investors looking to make substantial gains from their investments. With the UK market in decline and investors increasingly looking further abroad, India is an attractive proposition." For good measure he added the recent projection by Merrill Lynch of a 700 per cent rise in property values by 2015.

So who would be interested in investing in India? At the sort of figures Merrill Lynch is quoting, quite a few might. But British Indians in particular might want to "give back and profit by investing in their motherland", said Mr Fassnidge. This, he said, would be "emotional", but also "effective and profitable".

He concluded: "All the economic indicators project a bright, sustainable future for India. In the last two years alone, property prices in India increased by 70 per cent. Industry commentators are mooting that whilst the USA and Europe look to be involved in an economic downturn, emerging markets such as India, may be the 'crunch proof' economies."

If the talk of something being able to withstand the credit crunch might sound particularly attractive, it should be noted that there are, of course, problems in some sectors. For example, the Financial Times reports that Kishore Biyani, chief executive of India's biggest retailer Pantaloon, has warned that commercial rents in many large cities are making life very difficult for retailers. But Mr Biyani went on to say that a correction in this area was already happening. He suggested that this could mean some new shopping malls failing to be a success.

Those with ancestral connections to India may be able to make the most of close cultural, family and extended community ties to gain knowledge about the best way to proceed in Indian property investment, while avoiding any pitfalls. For those without these connections, in-depth research and the tapping of information from those who are in the know could be the key to success.