Real Estate Overview

Dholera Smart City

A steady growth in economic activities, continuous rise in population, incessant migration towards urban India and the increasing popularity of nuclear family concept has collectively led to a phenomenal growth in the real estate sector of India over the past few decades.

The sector is the second highest contributor to the economy post agriculture and contributes 5-6% of India’s GDP(Gross Domestic Product). The Indian real estate market is expected to touch a whooping USD 180 billion by 2020 and the CAGR by such time is expected to be 11.2%, an exponential increase from its current levels.

As per research conducted by CRISIL, the overall housing shortage in India by end of 2014 was expected to reach 75.5 million units of which the shortage in urban towns and cities alone contributes to 21.7 million units. However , due to the constant migration form rural India to urban cities, the shortage in rural India was expected to decrease from 59.4 million units in 2008 to 53.8 million units in 2014.

A similar surge in demand in urban India is also seen in the commercial real estate sector owing to the economic development leading to growth in service sectors which in turn led to an increase in demand for office space. Besides commercial hubs such as Delhi and Mumbai, cities like Bengaluru, Gurgaon, Hyderabad, Chennai, Kolkata and Pune are also gaining ground and becoming popular commercial destinations for IT/ITeS and similar industries. Cities like Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune, Kolkata and Ahmedabad witnessed a 58% rise in demand within one year in commercial space of which Delhi NCR and Ahmedabad recorded the maximum demand in March 2014 as per the leading consultants Cushman & Wakefield

Considering the tremendous shortage in residential real estate space and acknowledging that a roof on the head is the right of every Indian citizen, the Government of India has come up with the mission of ‘Affordable Housing for All by 2022” and launched the 100 smart city project in addition to various other schemes prevalent to serve the purpose. The residential real estate markets is now witnessing focus on mid-income housing projects to induce affordability within the sector. With an initial funding by the government , the majority of the funding shall be met through Foreign Direct Investments and Public Private Partnership.

As a step towards supporting the mission, government has taken several initiatives including relaxation of FDI forms, enabling easier accessibility to finance, easing government norms and making doing business in real estate relatively easier .

Real Estate sector is all set for an explosion; one that shall uplift the society on a whole and give much needed impetus to the country’s economy.

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