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.