Indian Realty sector requires investment of US$257b by 2015
It is estimated that the real estate sector of India would require an investment of US$257 billion by 2015. This would include US$29 billion, which would be required by the residential real estate sector itself, including housing for Economic Weaker Sections (EWS) of society. It is expected that investments required in the Indian realty market by 2015 would be about US$42 billion, which excludes EWS housing.
Realty sector contributes 6.3% to GDP:
With the Indian economy maturing, experimentation with advanced funding options like Real Estate Investment Trusts (REITs) in very much on the cards. This will enable industry players to enjoy a global competitive edge in the market. It is estimated that the realty sector has contributed about 6.3% to the country’s GDP in 2013. Besides, it is expected to generate 7.6 million jobs during this year. It is also expected that around 17 million jobs could be generated by the realty sector by 2025.
Housing sector contributes about 6% to GDP:
The housing sector contributes approximately 6% to the country’s GDP. Simultaneously, other sub-sectors like retail, commercial as well as hospitality have also grown proportionately, thereby enabling to meet the increasing infrastructure requirements of the country.
Proposed DFC between Delhi and Mumbai along the DMIC corridor:
It is expected that the development of the Delhi-Mumbai Industrial Corridor (DMIC) would facilitate the development of the warehousing and logistics sector of the country as well. The DMIC is being planned as a joint venture between India and Japan. As part of the project, a Dedicated Freight Corridor (DFC) is proposed to be constructed between Delhi and Mumbai. Besides, there is also a proposal to develop infrastructure facilities across a distance covering about 150-200 km, on either side of the corridor.
DMIC project expected to create seven new cities:
Moreover, the DMIC project is also expected to create seven new cities along the corridor stretch. This will include the development of two smart cities as well as 24 manufacturing cities, that will come under the investment region as well as the investment area of the project. On the whole, the project will include 24 nodes, 11 investment regions as well as 13 industrial areas. The entire project is expected to be operational by 2025.
Increase in costs to hamper realty development:
Increase in construction and labour costs have resulted in several real estate developers having to pay off huge debts. Moreover, the toughening of interest rates as proposed by the RBI will further dampen the spirits of realty developers and result in a jolt in the sale of realty property. As a result of these macro-economic conditions existing at the moment, the realty sector across major cities is expected to display a mixed performance.
