It is time to rejoice and be happy for those in the real estate business. Going by the trends and reports, the real estate market is slated to double in the next decade.
CREDAI, in association with its knowledge partner, the CBRE, has released a report, India 2030 — Exploring the Future, at its 19th Annual International Convention, NATCON-2019, in Israel. The report encapsulates the potential of the Indian economy by 2030 and its implications on the growth of the Indian real estate sector. According to the report, India is projected to have a $9-trillion economic opportunity by 2030, where the per capita income could touch $5,625 for a population of about 1.5 billion and the required annual spending on infrastructure will touch 7%-8% of its GDP.
Emergence of India’s digital, sharing and consumer economy, evolution of workplace strategy and technology also bodes well for the industry. The demand for residential and office stock will continue to grow at the back of policy reforms on ‘affordable housing’ and close integration of start-ups and conglomerates to offer tech-enabled services. Furthermore, the retail and logistics industries, which have mostly remained in the background until now will become significant contributors as India will consolidate its position as the third-largest consumer market behind the US and China.
‘CREDAI committed to New India dream’
‘The correlation between the growth of some of the most developed economies and realty has been well established for years and this report also echoes that. With our current government, we’re all dreaming of a New India, which is full of opportunities and implies progressive growth for businesses, homebuyers and the community at large and we, at CREDAI, are committed to transforming realty to achieve that goal’
- Jaxay Shah, CREDAI Chairman
On the occasion of the unveiling of the report and addressing experts from the real estate fraternity, CREDAI President Satish Magar said, “India continues to be a high-priority market for its long-term growth potential as is evident from the increased investment flows in the past few years. The government’s $5-trillion mission and vision of a ‘New India’ implies that top industries contributing to our economy, such as real estate, need to usher in transformative measures that can help shape these goals. This report is a milestone in this direction because it not only determines the trends which need to be leveraged, but also presents an analytical view on the next decade where we can achieve even more if we work towards developing a new workplace strategy, integrated transport systems, expand affordable housing and a renewed focus on application of sustainability in everyday life.”
Speaking on the occasion, CREDAI’s President-elect, Harshvardhan Patodia, said, “CREDAI NATCON is an experiential and interactive platform for its fraternity members, fellow developers and colleagues to learn the knowhow of the trends and global best practices permeating the industry and the sector. The theme, Resilience to Excellence, complements well the present state of the Indian real estate industry that has merged its resilient phase — slow and disrupted, but steady — with a wave of upward and positive growth in the times to come.”
While releasing the report, Anshuman Magazine, Chairman-CEO, India, South-East Asia, Middle East and Africa, CBRE, said, “Following positive policy reforms and the emergence of a strong workforce, the momentum of India’s economic growth is steady and will only grow stronger in the next 10 years. The factors that will further facilitate this growth trajectory are investment, improved governance, human capital upgrade, improved connectivity, infrastructure enhancement, strengthened institutions (governance, administration and law), policy reforms and integrated sustainability of the entire ecosystem.
“The theme of this year’s conference, Where Resilience Meets Excellence, has an easy comprehension — patience and unapologetic perseverance. India has a one-of-its-kind growth story, with real estate as the country’s growth propeller and at the cusp of transformation. Therefore, we, at the CBRE, are committed to being at the centre of this growth trajectory. The CBRE-CREDAI report, India 2030 — Exploring the Future, unveils a sectoral overview and outlines what is in store for India in the coming decade.”
Key trends listed in report
- Bringing the woman workforce to boost labour force participation — India’s labour force participation rate (LFPR) was only 51.9% in 2018, a sharp decline from 55.8% in 2008. The drop was primarily due to comparatively lower female participation in the workforce, especially in the rural areas.
- Reduce international migration from India to widen in-house talent base — The total number of workers who migrated from India has declined since 2015 due to the economic slowdown in the Arab countries, where the largest chunk of Indian migrants resides. Given the skill sets of these migrants, their presence in India would contribute significantly to the entrepreneurial evolution in the country over the next 10 years.
- Wide scope for upskilling — More than half the Indian workers will require reskilling by 2022 to meet future talent demands. In order to keep up with the demands of its young populace, India would have to focus on education, skill development, innovation, productivity enhancement and technology adaptation.
- Urban cities are engines of growth — By 2030, India’s urban population will contribute as high as 75% of the GDP, up from 63% at present. However, this projection can only become a reality if the pressures on the physical and civic infrastructure systems of our cities is eased. Most Indian cities lag in key quality of life parameters and are plagued by such challenges as poverty, lack of affordable housing, traffic congestion, overcrowding, environmental degradation and air pollution.
- Infrastructure is vital for the creation of liveable cities — India needs to spend 7-8% of its GDP on infrastructure annually to boost public and private investment in infrastructure.
- Scale of development in residential households — The number of households is expected to surge, with close to 386 million households and almost 40% of Indians being urban residents by 2030. The scale of development is likely to change significantly as, from mere standalone buildings, developers are expected to venture into integrated townships, theme-based townships, developments linked to economic activity and even self-sustaining mini-townships or cities.
- Fragmentation in the Indian residential segment — By 2030, residential real estate has the potential to almost double from the current stock of 1.5 million units in key cities. The increasing millennial and Generation Z population is expected to be account for 77% of the overall working population in India by 2030. The housing needs of such population groups are slightly unique. They look for convenience, service and a frictionless experience while buying or leasing residential property.
- Affordable housing will be a key trigger for demand — Demand will remain concentrated in the affordable segment and will gradually shift towards the mid-end segments. Affordable housing will remain the dominant segment in the coming years with a total of 10 million PMAY(U) units to be delivered by 2020, itself.
- Maintaining the momentum — Office stock to grow from 600 mn sq.ft in mid-2019 to a billion sq.ft by the end of 2030 and flexible to become mainstream — comprise 8-10% of the total office stock.
- The untapped sector — Warehousing stock to touch 500 mn sq.ft by 2030 and share of Grade A stock to witness a continuous increase.
- The retail opportunity — By 2030, nine out of 10 Indians over age 15 will be online and retail shopping centre stock to cross 120 mn sq.ft by 2030