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How the Housing Market in India Differs From U.S.


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Ramnik Chopra, managing director and lead investor in Coldwell Banker India.

“Real estate in India is like football in the U.S.,” says Ramnik Chopra, managing director and lead investor in Coldwell Banker India. He’s not saying it’s a game, only that homeowners are fanatical scorekeepers. “Everyone wants to know the price of their property” and every weekend they’re checking the newspapers for the stats, he says.

The interest in residential real estate, coupled with a new law implemented in April that ups the gamesmanship for real estate agents is making Coldwell Banker’s expansion in India extremely timely. “Previously, anyone could sell real estate,” Chopra says.

Chopra was one of the members of the franchise trade mission organized by the International Franchise Association and the U.S. Commercial Service that went to two cities in India and Sri Lanka back in December. He met with potential investors in one-on-one meetings set up by the local commercial service specialists.  

The new law also holds agents liable for the actions, so Coldwell Bankers’ training is a boon to agents who want to improve their skillset in order to comply with the law. The U.S. franchise also offers technology and a tested business plan for brokers or agents who want to benefit from the changing landscape of residential housing in the country with a middle class numbering around 267 million in 2016.

There are significant differences in residential real estate in India from the U.S. About 60 percent of all real estate sold in India is new or under construction, according to Chopra. In the U.S., about 95 percent of homeowners have a mortgage, while it’s “less than 50 percent—closer to 20 percent—in India,” he says, adding Indians “are historically savers.” He estimates that most families save about 30 percent of their income.

There are reasons fewer people borrow from banks, he says. Loans aren’t as readily available in India as they are in the U.S. and mortgages tend to be five years. “So you might as well save,” he points out. That may be changing as the prices for urban housing increases significantly, forcing young professionals to apply for mortgages.

Real estate there is more than a place to live, it’s an investment. Around 80 percent of the wealth in India is in real estate, he says. And about 20 percent of residential real estate in India is owned by Indians who live outside of their homeland, he says.

While couples in the U.S. buy a starter home for their nuclear family to live in, in India often the first home is bought in the city where the couple’s parents live. “Joint-family living is common,” Chopra says. And living with your parents is common.

Chopra looks a bit apologetic as he tells me that he now lives in a 5,000-square-foot house in Philadelphia, but can still remember his family of seven living in 1,000 square feet and thinking they were lucky to have so much space.

Coldwell’s target is to open 25 offices a year. They’ll start in the large cities such as Mumbai, New Delhi and Hyderabad, but then move into the “smart cities being built” as next-tier cities.

Another complication for agents in India is that there is no MLS (Multiple Listing Service), so locating property is difficult. “Signage is bad in India,” he says. (Even) Google will say ‘turn right at the gas station.’”

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