July 11 (Bloomberg) -- Demand for housing in China and India will increase as more people move to urban areas and incomes grow, according to a University of California, Berkeley study.

The number of people living under one roof is expected to decline in emerging markets and that will boost the need for housing, according to the report by Ashok Bardhan and Cynthia Kroll of the Fisher Center for Real Estate and Urban Economics at the university's Haas School of Business.

``India and China, for example, still have the majority of their population in rural areas, in contrast to more advanced economies, where more than three-fourths of the population reside in urbanized areas,'' they wrote in the report.

Morgan Stanley and Jones Lang LaSalle LLC are among the U.S.-based companies piling into Asian real estate as booming economies drive up property prices. LaSalle Investment Management, a unit of the world's second-largest commercial real estate broker, said this month it plans to triple its investments in Asia to $20 billion within four years.

More than 100 real estate funds may raise a record $69 billion this year as investors seek better returns than stocks and bonds provide, according to Private Equity Intelligence Ltd.

``One of the key areas of opportunity for firms from developed countries, and from the U.S. in particular, is in the fast-growing economies of Asia,'' Bardhan and Kroll said.

China Golf, Mexico Mortgages

Companies may also find opportunities building golf-course communities and other leisure developments in China, Kroll said in an interview.

In North America, the increasing availability of mortgages in Mexico is boosting demand for houses there, Kroll said.

The report, focused on the effects of globalization on real estate, pointed out that San Jose, California, San Francisco and New York, which were in the 10 most expensive office markets in the world in 2000, according to a Grubb & Ellis survey, weren't on the list in 2006. Instead, places like Mumbai and New Delhi were on last year's survey.

``The change in the composition of the leading office markets between 2000 and 2006 demonstrates how quickly urban commercial real estate markets in emerging economies can become part of the global bidding process,'' Bardhan and Kroll wrote in the report.

To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net.

Last Updated: July 11, 2007 19:29 EDT