The share of real estate sector in the country’s GDP is expected to double by 2025 with jobs likely to increase by more than 80% by 2025
With increasing urbanization and the transformation of real estate sector from a largely fragmented one to an organized one, with a significant impact of reforms such as RERA and GST, it is expected to increase the annual real estate supply in India from 3.6 billion sq ft in 2013 to 8.2 billion sq ft in 2025. This increase will also have an impact on the growth of jobs that are likely to see a spurt of more than 80% by 2025.
According to a report by CREDAI-CBRE, the potential employment opportunities in the sector are expected to touch 17.2 million jobs by 2025 up from 9.2 million in 2016. The economic contribution of the real estate sector is projected to increase by a significant aspect during the period. The expected rise is from 6.3% in 2016 to 13% in 2025. Further, long term prospects appear highly positive for the sector with a potential increase in the completed space from 3.6 billion sq ft in 2013 to 8.2 billion sq ft in 2025.
With the implementation of GST and RERA, the real estate sector in the country continues its metamorphosis from a largely fragmented one to a structured sector like its peers in the developed economies across the globe. It also shows the growing prominence of India in the global scenario which has had an impact leading to increased responsibilities and expectations on the sector. As per a report, India has emerged as the most preferred outsourcing destination. Among the Asia Pacific based companies, 82% of the Indian respondents plan to increase their headcount in the coming three years, reflecting the country’s buoyant economy and steady progress in enacting the regulatory reforms in addition to the booming outsourcing and IT sector.
Recent developments in the country would also spur the real estate growth. Under RERA, a regulator will bring in credibility to the sector in the long run which is likely to open up new funding avenues and bring down the lending costs. RERA will also increase the trust among buyers of real estate. With increasing urbanization and the introduction of new construction technologies, the growth of real estate activity is all set to reach new heights. The implementation of GST would result in the consolidation of warehousing which will lead to the emergence of a larger and better quality warehouse and boost inflow of institutional capital. Developers will also be able to gain access to funds by monetizing their assets in the coming quarters with REIT listings becoming a reality.
Positive demographics and a regulated environment has led real estate sector to spearhead the Indian economy by doubling the GDP contribution by 2025. This will lead to an increase in the job opportunities and also have a cascading effect on about 250 ancillary industries which are highly dependent on the real estate industry. With favorable government policies on board, all the factors point towards a promising future of Indian real estate sector.