Real estate sector on decline in MP, says Assocham study
Report says investments have declined at a compounded annual growth rate of 29% in past four years
Apr 24, 2015
Source : Business Standard

 

Bhopal: An Assocham study today painted a sordid picture of investment in real estate sector today and said investments in the sector from various public and private sources in Madhya Pradesh (MP) have declined at a compounded annual growth rate (CAGR) of 29% in past four years.

"It has dropped from a level of Rs 46,940 crore as of 2011-12 to just about Rs 16,790 crore during 2014-15," the apex industry chamber said today.

In terms of year-on-year, investments in MP real estate sector have dropped by over 24% from a level of Rs 22,170 crore of 2013-14 to Rs 16,790 crore during 2014-15, said the sector-specific survey conducted by the chamber.

"Ownership-wise, government sources accounted for major share of 54% of the total investments attracted by the real estate sector in MP while private players accounted for the remaining share," according to the analysis of the study carried out by the ASSOCHAM Economic Research Bureau (AERB).

"Investments made by private sources in the sector of Madhya Pradesh had declined by 40% between 2011-12 and 2014-15," said DS Rawat, national secretary general of ASSOCHAM while releasing the chamber's analysis.

Rawat, however said, projects with majority share of 66 percent investments in real estate sector of Madhya Pradesh are under different stages of implementation, however, projects with about 34% investments have remained non-starter even during 2014-15 and share of such projects has increased significantly from about 12% as of 2011-12.

The apex industry chamber had conducted a survey by interacting 100 small and big companies operating in realty sector in cities like Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Indore, Jaipur, Lucknow, Mumbai and Pune and found that majority (75%) of the total real estate developers feel let down by the Union Government due to lack of focus on improving demand and supply in the sector.

Investments attracted by real estate sector from various public and private sources across India have declined by six% in past four years i.e. from a level of Rs 15.2 lakh crore as of 2011-12 to about Rs 14.3 lakh crore as of 2014-15, the study further said.

However, there has been a slight increase of just over two% year-on-year in the investments attracted by realty sector i.e. from a level of Rs 14 lakh crore in 2013-14 to Rs 14.3 lakh crore in 2014-15.

Private sector accounted a major share of 85% of the total investments attracted by the real estate sector across India while government or public sources accounted for the remaining share, the ASSOCHAM analysis pointed out.

Real estate projects with about 76% of the total investments attracted by the sector across India remained non-starter during the aforesaid period, it added.

Five states namely Maharashtra (21%), Uttar Pradesh (14%), Gujarat (13%), Karnataka (12%) and Haryana (eight%) have highest share in total investments of the real estate sector in India as of 2014-15, the ASSOCHAM study said.

Clocking a compounded annual growth rate (CAGR) of about 82%, Assam has recorded maximum growth in attracting investments in the sector during 2011-12 and 2014-15 followed by Bihar (19%), Odisha (17%), Uttar Pradesh (16%) and Uttarakhand (12%) amid top five states in this regard.

While Jharkhand (40%), Himachal Pradesh (37%), Madhya Pradesh (29%) and Haryana (16%) have registered maximum fall in real estate investments, the ASSOCHAM study said.

 

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