DELHI: In a report, global realty consultancy firm CB Richard Ellis said that the potential for development and growth in the real estate sector is tremendous. The sector is expected to generate over 17 million jobs across the country by 2025, thereby making a significant contribution to the GDP.
Anshuman Magazine, CMD of CBRE South Asia, however, said that to achieve this potential, the industry requires the support and encouragement of policymakers.
As per the report, the total economic footprint generated by the construction of this real estate pipeline will require a total investment of about Rs 2,54,000 crores, which will further help generate revenue worth Rs 3,70,000 crores, and provide employment to about 7.6 million people across the country in 2013. The total contribution of the real estate sector to the national GDP has been estimated to be about 6.3% in 2013 alone.
The report further pointed out that this footprint is restricted by numerous challenges inhibiting the sector like high borrowing costs, lack of institutional funding, lengthy approval processes, and slow and uneven infrastructural development.
Once these bottlenecks are addressed, the economic contribution of the sector is expected to increase considerably, with its share of the GDP more than doubling to 13% by 2025.
With the removal of the inherent bottlenecks present in the sector, the long term prospects appear highly positive for the sector, with a potential increase in completed space from 3.6 billion sq ft in 2013 to about 8.2 billion sq ft in 2025. This will generate significant employment opportunities, with annual employment expected to increase from 7.6 million in 2013 to almost 17 million in 2025, thereby providing substantial socio-economic opportunities for growth in the country. However, the report further says that this expansion of the real estate sector could happen before 2025, if the government provides relevant policy measures to create a more conducive environment for growth in the sector.
The CBRE report lists a set of recommendations, which could assist the sector in achieving its full potential in the long term. These include measures like addressing supply constraints, streamlining the approval processes, permitting new sources of real estate funding, and promoting private sector participation in the construction sector. An effective implementation of these recommendations will undeniably push the growth of the sector to a higher trajectory.