World's two fastest growing economies China and India will continue to witness boom in the real estate segments in smaller cities as both countries are expected to record strong growth in residential demand in the coming years, says a report.
Further, investments volume in the two neighbouring nations is projected to go up in the next few years. According to a report prepared by the research group of Germany's Deutsche Bank, the long-term growth prospects for both countries "remain very good."
"All commercial real estate segments continue to boom Tier-II cities will gain particularly... Investment volumes are still very low. This will change rapidly in the next few years," the report titled 'Real Estate Investments in China and India: Big returns in big countries?' said.
Although, strong residential demand growth is expected, the bank noted that "dangerous exaggerations can occur." An important growth driver for the real estate market would be the increasing urban population in both countries.
India and China are projected to witness increased number of urban population especially by the end of 2050. From just about 30 per cent, India's urban population is anticipated to touch 55 per cent by 2050.
According to the report, another growth driver for both countries would be the rising population of working age. In the near term, that population is expected to touch a peak of over 70 per cent in China.
The working age population in India is projected to be on the upward curve in the coming years and would be above 65 per cent by 2050.
(The Financial Express-30.07.2008)
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