New Delhi: The real estate industry is attracting significant investments in seven of the 20 top well-performing states even as the property market is facing slowdown, a study said.
Haryana saw almost 50 percent of its investment coming in the real estate sector as of December 2011, the Assocham study said.
The other states attracting sizeable investment in the sector includes Uttar Pradesh, Maharashtra, Gujarat, Karnataka, Andhra Pradesh, Tamil Nadu, Rajasthan and Punjab.
High interest rates on home loans and global economic uncertainty are the main reasons for the slowdown in the sector. Most of the companies have been showing decline in profits for the last several quarters.
The study found that "the investment in real estate has a strong nexus with the growth and investors’ interest in the services sector".
The services sector also attracted a good chunk of investment in the states which were fancied by investors in the realty sector.
"In Haryana as of December 2011, the services sector accounted for about 34 percent of its total investment. Similarly, in Maharashtra as much as 37 percent of its total investment went into the sector," Assocham Secretary General D S Rawat said.
As Gurgaon bordering Delhi has become a hub of domestic and multi-national companies, the real estate development was the focal point in Haryana as the sector attracted 49.7 percent of the total investment in the state, the study said.
"What Gurgaon has done to Haryana in terms of investors’ interest in the real estate sectors, Noida and Greater Noida have done it for Uttar Pradesh," it said adding in UP, the realty sector accounted for 22 percent of the total investment in the state.
Of its total investment of Rs 4.98 lakh crore as on December 2011, the real estate sector accounted for Rs 2.48 lakh crore in Haryana, which has other towns like Faridabad, Sonepat, Ambala, Panipat and Karnal where the realty sector is growing fast, even though they are no match for Gurgaon, it added.
First Published: Tuesday, July 17, 2012, 20:00