Real estate can give the much-required push to Indian economy
Updated: Sep 18, 2020 1:33 PM
The realty sector is the second largest employer in India after agriculture and its contribution to employment is expected to rise further owing to the shift in consumers’ preference towards owning houses over rental spaces.
Real estate, whether commercial or residential, has been considered as a relatively safe asset class for investors.
Real estate is expected to contribute 13 per cent to India’s GDP by 2025. The growth of real estate will have a cascading effect on ancillary industries such as infrastructure and cement, leading to the creation of direct and indirect employment. The realty sector is the second largest employer in India after agriculture and its contribution to employment is expected to rise further owing to the shift in consumers’ preference towards owning houses over rental spaces.
Young working professionals had earlier contributed to rental yields for most realty players in Gurugram. The COVID-19 has pivoted the focus on financial security and sound investment backup. Now the same young lot is considering buying houses for both personal use as well as for investment purposes.
Another trend is the proliferation of technology that has automated certain tasks and somewhat reduced the dependence on labour. Technology service providers stand to gain immensely as all realty players are leveraging emerging technologies. Smart construction techniques such as steel framing, prefabricated steel floor decks have expedited the pace of construction, leading to the delivery of projects in record time. With sustainability gaining new currency in real estate, eco-friendly projects and energy-efficient buildings have found favour with consumers.
The value of real estate assets hinges on a robust infrastructure. The presence of schools, hospitals, connectivity to railway and airport boost the value of real estate properties. Additionally, consumers are looking for curated customer experiences and are ready to go the extra mile to afford it. Well-travelled, business-savvy millennials are now eyeing premium housing that offers the best customer experiences such as futuristic approach in terms of automation; green practices, the efficiency of space so that it can be customized and so on. Moreover, the Walk-to-Work concept has gained momentum with the increase in well-planned mixed use developments.
Real estate, whether commercial or residential, has been considered as a relatively safe asset class for investors. India’s growing economy and wide consumer base are conducive to investment in real estate. Renowned international architects are now eyeing the Indian market and are collaborating with leading real estate players to design remarkable projects. The clarion call towards ‘Local for Vocal’ by Hon’ble Prime Minister Shri Narendra Modi has boosted the consumer sentiment towards Indian companies with sound credentials.
The backdrop of depreciating rupee and falling crude oil prices further accentuate the prospects of investment in India. Multiple job opportunities in Corporate Inc in India, job losses in the international market, and job insecurity induced by the pandemic will lead to NRIs wanting to come back to their homeland. This is an opportune time for them to invest and plan a comeback to the home turf.