It might come as a surprise to many but in India, the real estate sector is the second-highest employment generator after the agriculture sector and is expected to touch US$ 1 trillion by 2030. By 2025, the sector is expected to contribute 13% to the country’s GDP. The emergence of nuclear families, rapid urbanisation and rising household income are some of the key factors that drive the growth of the real estate sector in the country.
It would be worth recounting here that retail, hospitality, and commercial real estate are all growing at a very healthy rate in the country and are offering the much-needed infrastructure for the country’s growth.
Particularly glowing is the residential sector with 86,139 housing launches across the top eight Indian cities in the second half of 2020. Home sales volume across eight major cities in India increased by 2x to 61,593 units from October 2020 to December 2020 as compared to 33,403 units in the earlier quarter which is a clear pointer towards healthy recovery after the lockdown that was clamped in the second quarter.
Economic Times Housing Finance Summit has pointed out that in India 3 houses are built per 1,000 people per year. However, the required construction rate is five houses per 1,000 people. This makes the current shortage of housing in the urban areas be roughly 10 million units. An additional 25 million units of affordable housing would be required by 2030 to meet the growing residential demand of the country’s urban population.
However, the good thing is that the residential sector is expected to grow at a very healthy rate as the central government is aiming to construct 20 million affordable houses in the urban areas across the country by 2022 under the ambitious Pradhan Mantri Awas Yojana (PMAY) scheme. Moreover, the co-living market size across India’s top 30 cities is expected to grow more than double and touch the US $ 13.92 billion by 2025.
Buoyant by growing transparency and returns, private investment in the realty sector has witnessed a steep rise. 2020 witnessed $5 billion institutions investment in real estate where as private equity investment in the sector was equivalent to Rs 23, 946 crores across 19 deals in Q4FY 21.
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