city of Pune, said Zain Fancy, head of Morgan Stanley Real Estate in the Asia-Pacific region.

“India is one of the most attractive markets,” Fancy said.

Relative to wages, India is among the affordable real-estate markets, which offers scope for growth, he said.

Rising demand for homes, offices and shopping malls is attracting banks such as New York-based Morgan Stanley and Goldman Sachs Group Inc into India’s real estate market, as the government eases rules on investment from overseas.

Increasing wages in India is boosting demand for more modern homes, especially in smaller cities.

Commercial and residential construction in India will surge to $50 billion by 2010 from $12 billion in 2005, a Merrill Lynch & Co report said last year.

Goldman said in March it would focus on real estate investments as it seeks to expand in India, after ending a 10-year alliance with billionaire Uday Kotak.

Morgan Stanley said this month that it invested about Rs 300 in Alpha G:Corp Development Pte Ltd, which has real estate projects in Gurgaon, Amritsar, Jaipur, Ahmedabad and other cities.