Real estate sector to play a critical role in supporting the 'housing for all' initiative
The real estate plays a multiplier effect in the development of the economy and the ecosystem of the country. The sector is expected to reach a market size of $1 trillion and make up 18-20% of the country’s GDP by 2030, Amitabh Kant, CEO, Niti Aayog said on October 22.
He also said that the Securities and Exchange Board of India (Sebi) has already given its approval for Real Estate Investment Trusts (REITs), which will create an opportunity worth Rs 1.25 lakh crore in the coming years.
He was virtually addressing the 13th Edition of Confederation of Indian Industry (CII) Realty & Infrastructure Conclave 2021 organised in association with JLL as the Knowledge Partner. The theme of conclave is ‘What’s next: The future of real estate'.
He said the last 18 months have been challenging for India and the economy in general, and the real estate sector was not left untouched. "However, we see a silver lining as the vaccination rate has picked up and the infections are slowly coming down," he said.
Kant said that the real estate sector and its stakeholders also play a critical role in supporting the 'housing for all' initiative of the government.
"The real estate sector plays a multiplier effect in the development of the economy and the ecosystem of the country. The sector is expected to reach a market size of $1 trillion and contribute 18-20 per cent of the country's GDP by 2030," he said.
The government along with several states has taken initiatives to encourage redevelopment in the sector. The smart city project with a plan to build 100 cities is a prime opportunity for real-estate companies, he noted.
“A slew of measures introduced by the government including monetary and fiscal stimulus have supported businesses and industries through these challenging times. The Atmanirbhar Bharat Package 3.0 announced by the honourable Finance Minister provides tax relief measures for real-estate developers and home buyers. The government has also announced setting up of Alternative investment Fund, Affordable Housing Fund and National Housing Bank with an initial corpus of Rs 35,000 crores for micro financing of housing finance companies," he said.
"Housing sales are recovering, buoyant by the decade low mortgage rates. Make in India and India’s growing might as a digital economy has spurred our warehousing and industrial segments,” he said.
He noted that going forward technology will be a key game changer. India and India’s growing might as a digital economy has spurred “our warehousing and industrial segments,” he said.
“India remains very committed to the Paris Agreement towards positive action climate change... The built environment will be vital in moving towards a sustainable future. Big corporates are realigning their sustainability roadmaps to speed up their net zero goals as a global movement towards more sustainable choices is underway,” he added.
COVID-19 has resulted in housing demand consolidating towards branded developers: experts
Towards brands, technology
Addressing a session on The Future of Residential Real Estate, Abhishek Kapoor, executive director & CEO, Puruvankara Ltd, said that the pandemic made a difference in the way people looked at homeownership.
“As people realised they wanted homes, the ready-to-move-in inventory came down significantly and that has led to new opportunities in the under construction and new launches segment… demand for homes going forward is definitely sustainable.”
He also said that demand has consolidated towards branded and listed developers. “We are witnessing a convergence of capital and demand. Going forward, the market share of certain set of developers will consistently grow.”
Reeza Sebastian, president - residential business, Embassy Property Developments, said that COVID-19 helped improve consumer perception of home ownership and that was supported by low mortgage rates and competitive pricing, adding technology is expected to become a big disruptor going forward.
“Investment in technology should extend to construction technology as well to speedily deliver homes,” she added.
Sriram Iyer, president & CEO, TVS Emerald, said that the real-estate sector is expected to follow the retail consumer segment and there may be revenge buying in the housing sector too but cautioned that, with commodity prices being high, prices are expected to go up.