India’s real estate sector, which is a $200-billion market, is gradually coming out of the disruptions caused by the Covid-19 pandemic and is on the path to become a $1 trillion industry by 2030, said ministry of housing and urban affairs (MoHUA) secretary, DS Mishra.
“The sector is around $200 billion at present, and projections are that it will hit $1 trillion by 2030. In fact, the sector provided employment to 5.5 crore people in 2019, and is expected to provide jobs to 7 crore people in the coming years,” he said at an event organised by industry association, CII.
The growth story of real estate is intact, despite the country facing the onslaught of the pandemic, Mishra said, adding that an estimated 88 crore people will be living in urban areas by 2051 as against the current 46 crore, thereby creating huge demand for houses, road, electricity and other infrastructure
Emphasising the importance of real estate in India’s economy, he pointed out that the sector creates demand for around 270 industries, including cement and steel.
The recently introduced Model Tenancy Act would make rent laws more equitable and help unlocking a large number of housing units which could be leased out.
Mishra clarified that the law is prospective and would not affect existing rental agreements.
K Raheja Group president, Neel Raheja said that despite challenges the sector is on the growth trajectory and new opportunities are emerging from sub-sectors like warehousing, data centres and logistics.
He expressed confidence that the industry will reach a size $500 billion within next 3-4 years.
Seeking support for the industry, Raheja highlighted the issue of high risk weightage given by RBI to real estate industry which becomes a deterrent in raising affordable finance. There are restrictions on InvITs and REITs financing, land financing, foreign portfolio and ECBs which needs to be looked into to enable the real estate industry to tap-in low cost finance for housing sector.