MUMBAI: The real estate sector in the country would need an investment of $ 257 billion by 2015, including Economic Weaker Section (EWS) housing, of which residential real estate alone would require $ 29 billion, according to an EY-FICCI real estate report released today.
"Investments required in the Indian real estate market by the year 2015, is approximately $ 42 billion (excluding EWS housing) and $ 257 billion (including EWS housing). Residential real estate alone will require an investment of $ 29 billion," the report said.
The Indian economy is ready to experiment with advanced funding options such as real estate investment trusts (REITs) and provide industry players with a global competitive edge, EY Tax partner (Real Estate Practice) Gaurav Karnik said.
"The contribution of the sector to country's GDP has been estimated at 6.3 per cent in 2013, and the segment is expected to generate 7.6 million jobs during the same period," he said.
He said the sector is also expected to generate over 17 million employment opportunities across the country by 2025.
While housing contributes approximately around six per cent to the country's GDP, retail, hospitality and commercial sub-sectors have also grown simultaneously, meeting the increasing infrastructure needs, he said.
Development of Delhi-Mumbai Industrial Corridor (DMIC) would set a new precedent for the development of the logistics and warehousing sector, the report said.
A combined initiative between India and Japan, the project aims to build a Dedicated Freight Corridor (DFC) between Delhi and Mumbai as well as develop infrastructure across 150 km to 200 km on both sides of the corridor.
The project is expected to create seven new cities, including two smart cities, besides development of 24 manufacturing cities (investment region and investment area).
Overall, the project comprises 24 nodes, 11 investment regions and 13 industrial areas in the DMIC, expected to be completed by 2025, it said.
"Several real estate developers are reeling under high debt due to increasing construction and labour costs. Hardening of interest rates by the central bank is expected to further dampen the sale of real estate properties," Karnik said.
Due to these macro-economic conditions, the Indian real estate sector across major cities is expected to see a mixed performance, the report said