Indian Real Estate

Chennai, Aug. 7: An industry chamber study estimates that the annual growth rate of the Indian economy by 2015 would touch over 12 per cent, in which the housing and real estate sector would have the potential to grow at 14 per cent per annum and double its contribution to the GDP from the current level of less than one per cent.

The housing and real estate sector would generate over four million jobs by 2015 with demand for dwelling units likely to rise to 80 million for lower-middle and low income groups, involving an estimated investment of $670 billion, the study said.

The Associated Chambers of Commerce and Industry of India study, to be released soon, projects that demand for dwelling units will grow to 90 million by 2020, which would require a minimum investment of $890 billion.According to official estimates, the Indian housing sector at present faces a shortage of 20 million dwelling units for its lower-middle and low income groups which will witness a spurt of about 22.5 million dwelling units by the end of 10th Plan period.

Commenting on the study, chamber president Anil K. Agarwal said that investment required for constructing the dwelling units and related infrastructure during the projected period would be between $670 billion and $890 billion. This would mean about an investment of $34 billion to $45 billion per annum during the period. Currently, the housing and real estate sector is considered as one of the major engines to propel the growth, with its current size of roughly $14 to $15 billion.

The sector is the third-largest employer next only to the agriculture and textile sectors. The study has suggested a multi-pronged strategy to the government to ensure that the projected growth of housing and real estate in terms of dwelling units and their investments is achieved. The strategy calls for conferment of infrastructure status on the housing sector, to enable it to have easy access to low-cost institutional funds as also allow this sector to tap long term funds.

Amendments need to be incorporated in the Central urban regulations and Rent Control Acts and ULCA of all the State governments should be scrapped to encourage entry of FDI in real estate developments, it suggested.