At a time when the real estate sector is going through a sluggish phase, a Ficci- Ernst & Young survey has underlined that the sector would embark on a high growth trajectory in the long run.

The report, highlights of which were released on Wednesday gave several pointers of the devlopments slated to happen in the sector. The full report would be released on September 10 at a real estate summit, which would have the presence all the stakeholders.

The Ernst & Young Realty Pulse survey has indicated that 62% of the developers foresee growth in the long-term. Around 35% developers define capital value of ?affordable housing? in the range of Rs1 million to Rs1.5 million.

The areas with potential for significant growth potential in the Indian real estate sector include healthcare infrastructure, logistics and warehousing and affordable housing formats.

The Ficci?Ernst & Young Real Estate Report is based on the qualitative survey conducted by Ernst & Young across six prominent cities comprising Delhi NCR, Mumbai, Pune, Hyderabad, Chennai, Kolkata and Bangalore.

Around 70% of respondents indicated an inclination to expand beyond the cities of Delhi, Mumbai, Chennai, Hyderabad, Bangalore, Kolkata, Pune and Ahmedabad. They think that this diversification is an effective hedge against market fluctuations in these cities.

While commenting on the slowdown in the sector, Ganesh Raj, partner and leader, real estate practice, Ernst & Young said, ?The temporal slowdown in the market will be followed by sustained activity as a result of innovative formats, new geographies and flexible pricing and delivery mechanisms.?

He also added, ?Despite market volatility in the past year, the Indian real estate sector has evinced interest of international funding agencies and has witnessed an ever-increasing pool of domestic industry players.?

According to Amit Mitra, secretary general, Ficci, ?The release of this report at the Ficci International Real Estate Summit will fuel ideas and opportunities while addressing industry challenges and showing the way forward to take the real estate sector to greater heights.?

One of the interesting indicators of the report is that the present asset class focus for developers continues to be residential as stated by 70%-80% respondents, followed by commercial and retail.

However, going forward, several ‘neo-assets’ like warehousing, healthcare infrastructure, logistics will emerge as integral part of a developer’s future portfolio.

Heathcare is seen to propel growth for the real estate sector in the tier II and tier III cities. The immediate driver for this would be the five-year tax break as per the latest Union Budget.

Another important aspect of the report is affordable housing. Recently this has attracted attention from prominent developers and private equity players primarily with the investment rationale of early mover advantage, volume-driven profitability, priority sector status accorded by government and subsidized land costs.

According to the report the key success factors for affordable housing as an asset class would be infrastructure support, use of alternate materials and low-cost techniques and mechanisms, subsidised land costs and faster approvals from the government.