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Friday, July 14, 2006

A housing boom in India

By Yaser Anwar, CSC of Equity Investment Ideas

With the housing boom dying out in the U.S. investors are headed down to India which is experiencing a housing boom itself. With 8% GDP growth for almost three years now & an influx of money flowing in from private equity to hedge funds, investors are betting on the Indian real estate market.

Fortune Magazine’s latest issue showcases India’s booming real estate market. A tech boom, a growing economy, and more Indians buying their first homes is fueling the housing market in India.

"India is one of the last few countries where there is primary demand for real estate rather than individuals trading up," says Rajiv Sahney, who runs the India operations of New Vernon Advisory, a $1.4 billion New Jersey hedge fund, to Fortune.

Merrill Lynch forecasts that India’s real estate sector will grow from $12 billion in 2005 to $90 billion in 2015.

"India is the most exciting real estate market in Asia," says Michael Smith, head of Asian real estate investment banking at Goldman Sachs to Fortune. "It's one of the last major countries in Asia with an improving market."

Morgan Stanley, Merrill Lynch, GE Commerce Finance Real Estate, pension funds Calpers and the Oregon Public Retirement Fund have all invested substantial sums in real estate investments, says Fortune.

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