The tide of foreign investment and a reported growth in India's domestic industries, particularly in the IT services industry, have created more employment opportunities for India's young, highly educated, professional workforce. Consequently, the country's middle class is increasing exponentially, and with the increase in disposable income, workers are buying homes. This coupled with the rapid increase in population contribute to a nationwide housing shortage estimated at 20 million residential units and rising. Currently, 1.21 billion Indians live in 249 million houses. Of those 249 million houses, 177 million belong to rural homeowners and just 72 million are in urban areas.

Housing developments are beginning to increase to meet the need. Residential construction is forecasted to grow from €11.9 billion in 2002 to €28.1 billion in 2012. With it, the government has begun to develop a mortgage market. Mortgages account for only 2% of India's GDP. In comparison, mortgages account for 54% of the U.S. GDP.

Sources: Real Estate Newsline, Ernst & Young, Summer 2005. "India At a Glance," Global Insight, 2003.