Welcome to CREDAI NCR
JW MARRIOT, AEROCITY,New Delhi
14th December,2013
Housing - The Game Changer
leading to double digit growth
Introduction:
India’s stupendous economic growth in the first decade of the 21st Century stands challenged in today’s day. From a 10.5% GDP in Q4 of FY 2005- 06 down to 4.8% to FY 2012- 13 has had tremendous impact, not just on the actual market scenario but on the sentiments of the economy. Most major contributors performing below expectation including primary and secondary sectors and devaluation of the Rupee against dollar have also compounded the situation.
Yet every cloud has a silver lining and the real estate sector can prove to be just that for the Indian economy as it has been contributing around 5-6% share of the nation’s GDP each year. Within the real estate sector, housing is one of the few sectors of the country that is nearly completely dependent on the domestic demand. With majority of the sectors growth coming from the residential development, the potential demand for real estate in India can only go northwards given the current estimate of its population growth. In a report released in 2012 by the Ministry of Housing & Urban Poverty Alleviation, the existing urban housing shortage was estimated at 18.78 million of which more than 95% comprised of demand from Economically Weaker Sections (EWS) and LIG.
It is also estimated that India will have nearly 900 million urban population by 2020, which would require to be employed and housed. The FY2012/13 had a growth of 6.0% for the Indian construction sector and is expected to reach 7.6% growth in FY2013/14. As per Cushman & Wakefield, based on past population growth trends alone, India will need additional urban housing of approximately 12.8 units in the next five years (2013 – 17) at an estimated building cost of approximately INR 13 - 19 trillion, clearly indicating the size and potential of Indian real estate market. Thus the potential of the Real Estate sector to create a positive and wide spread impact on the growth of the Indian economy should be recognized and encouraged at all levels. This housing demand boosts numerous other industries involved in manufacturing of cement, steel, iron, glass, electrical and electronic goods, paints and chemicals, wooden goods, plumbing goods, etc. and economic activities such as mining, brick making, sand collection, timber-related, amongst many others. Additionally, demand for services and labour in large quantities will also increase exponentially. As of today the construction sector employs a workforce of approximately 32 million making it the second largest employer after agriculture and according to FICCI, it has a multiplier effect on 250 other ancillary industries . As per the National Housing Bank, the sector ranks fourth in multiplier effect and total housing loans would add up to only 7% of the GDP, far lower than levels in most developed countries across the world .
In keeping with this backdrop, CREDAI & Cushman & Wakefield feels that the Housing sector can be the ‘Real Game Changer’ in leading India’s GDP growth back on its double digit path. Should the sector be given its correct fillip through governmental and policy decisions, the sector could as well prove to be the growth propeller for the country.
In this conclave 2013, CREDAI and Cushman & Wakefield, seek to understand how the potential of the housing sector can be maximized to ensure it contributes to its best capabilities towards the country’s economic growth. The specially designed sessions will bring together the stalwarts of the industry and economy in general who will help the industry stake holders to understand and help them chart out a brighter future for the sector. It will also take a look at a few examples from across the world where housing has performed to much greater potential. ‘Housing – The Game Changer: leading to double digit growth’ is set to be a forum with a mission increase the potential of the housing sector.
