Indian Realty Heading For Trouble – RICS Report

Recent findings by the RICS reveal that India would require 4 Million Civil Engineers over the next decade but the equivalent average supply would be only 642 Thousand!

The Royal Institution of Chartered Surveyors, claimed to be the mark of property professionalism worldwide, recently unveiled its research on “Real Estate and Construction Professionals in India by 2020”.

This research by RCIS was specially made to study the demand of real estate and construction professionals in the coming decade taking into considerations the present supply of skilled professionals employed in these sectors and the loop holes if any in both quantitative and qualitative conditions.

The findings of this research show that:

• The future of real estate and infrastructure in India will face a considerable shortage of manpower which might in turn hinder India’s realty growth ambitions.
• The future contributions towards India’s economic growth, population and consequent potential demand for reality and infrastructure looks disturbing.
• The type of professionals and skill sets that are essential for demand and supply of core professions of civil engineering, architecture and planning, the non-core professions and emerging professions is lacking.

Population outlook for 2020

By 2020, the population in India is expected to touch 1.38 billion, with 500 million (36%) of urban population and this 36% of population is anticipated to increase demand for quality real estate and infrastructure.

• By 2020, around 123 million of urban population is likely to seek professional help for building houses.
• India can expected demand for a massive 95 billion sq ft of real estate space for residential, retail, commercial, industrial and civil projects over 2010-20.
• This means that an average demand of 8.7 billion sq ft of realty space has to be built every year.

Supply in built surroundings – 2011

Of the 50 million professionals available in the present year, only 2 million are professionally qualified with respect to core and non-core areas of expertise. And the remaining are unskilled workers.

Statistics of professionals required – 2020

Shockingly, there is a demand-supply gap of 82-86% in the core professions huddle of civil engineers, architects and planners who are the foundation of methodological skills.

• On an average to meet the prospective real estate needs and planned infrastructure, India would require 4 million civil engineers, 396, 000 architects and 119,000 planners over the next decade.
• The equivalent average supply available is anticipated to be 642, 000 civil engineers, 65,000 architects and 18,000 planners.
• If this deficit in annual supply continues and the year on year demand increases, India might end up needing almost 45 million core professionals for 2010-2020.
• The collective demand-supply gap of close to 44 million core professionals in the same time frame is expected.
• The supply of “non-core professionals” in the built environment sector is estimated to be 3 times the supply of the “core professionals”.
• The “non-core professionals” are being accommodated in the “core professionals” sector to compensate the dearth.

This is a matter of concern as the “non-core professionals” without training lack the preferred skill sets. These professionals need to be trained on the realty, construction and infrastructure needs so as to convert them into specialized professionals.

The insinuations & recommendation

If quick measures are not taken on priority to curb this demand-supply gap, the present forecast of the economic situation will only worsen and India will need 5 million civil engineers, architects and planners but will be able to churn out 1 million of the proposed number.

• This will only pose a threat to the high growth of the real estate, construction and infrastructure sectors in India.
• Even though the expected impact on the Indian economy is hard to quantify, it is sure to result in recruitment issues, increase in cost of human resource, inability to complete quality tasks on time, skill gap in domestic manpower.
• This will lead to import of talent at higher costs and low standard of construction quality.

As of today, the majority of stakeholders are predominantly operating in their own domains with minimum interlinks between other domains. This has resulted in lack of knowledge transfer which if curbed can make a difference for all domains.

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