The crunch-proof country?

There may be some who believe that there is no country that can escape unscathed from the credit crunch. What began in the sub-prime collapse of the US housing market has taken its toll on many first-world financial systems, with stalling property markets, high interbank lending rates and, in the UK case, the Northern Rock affair.

But what of emerging markets? The wave of tiger economies in the Far East may have struck the sandbanks in the 1990s, but recent years have seen China and India surging ahead, with economic liberalisation, overseas investment and the vast labour forces provided by populations exceeding a billion each enabling spectacular growth to take place.

In the case of India, this is a boom which may shrug off any crisis, even the global credit crunch, Knight Frank has suggested.

Jaideep Singh, head of the firm’s India Desk, said: “The Indian economy is much better. The middle classes have made some money now so they can spend money,” which explained how the huge economic growth had transferred into property growth, followed by the development of a mortgage market. In addition to this, he noted, “The economy is quite robust at present and the stock market is good there.”

If this will buffer the Indian economy against the global situation, the India property market may continue to boom, although at present entry for overseas investors is restricted by the need to buy through partnerships with Indian citizens with whom they can team up. Mr Singh noted: “UK investors would have to join up with local people but on their own they can not just buy India property.”

This will not be so forever, he added, stating: “Hopefully it will change. It should change. They are relaxing it, gradually, over the years.”

Even so, it appears that right now the investors are coming anyway, seeing India as a haven from the credit crunch.

Investment firm Navyroof.com has certainly taken this view. It has stated that changes in property law will lead to a major surge in foreign investment, not least by Britons. Managing director Andrew Fassnidge commented: “With the law change it is now possible for foreign buyers to invest in India and the Indian property market is primed for a phenomenal boom. Merrill Lynch has predicted the property market will increase from a value of £6 billion in 2005 to
£45 billion by 2015.”

The firm forecast that one of the hotspots will be Rudrapur, which will be developed as a special economic zone concentrating on manufacturing industry and requiring large-scale investment in housing as people move there to work.

With such zones arising, large amounts of western capital, frustrated by the limitations of the UK credit crunch, could flow into such places, predicted Mr Fassnidge. For investors looking for an emerging market, India could be the place that crunches the crunch under the wheels of an unstoppable bandwagon.

In today’s world Property investment is an excellent investment option especially investment in UK