CREDAI-CBRE report identifies key trends paving the way for growth of real estate in 2030
By 2030, residential real estate has the potential to almost double from the current stock of 1.5 million units in key cities
CREDAI in association with its knowledge partner CBRE, released a report “India 2030 – Exploring the Future” at its 19th Annual International Convention, NATCON 2019 in Israel. The report encapsulates the potential of Indian economy by 2030 and its implications on the growth of Indian real estate sector. As per the report, India is projected to have a $9 trillion economic opportunity by 2030, wherein the per capita income could touch $5,625 for a population of about 1.5 billion and required annual spending on infrastructure will touch 7-8% of its GDP.
Emergence of India’s digital, sharing and consumer economy, evolution of workplace strategy, technology will also bode well for the industry. The demand for residential and office stock will continue to grow at the back of policy reforms on Affordable Housing and close-integration of start-ups and conglomerates to offer tech-enabled services. Furthermore, Retail and Logistics industry which have mostly remained in the background till now will become significant contributors as India will consolidate its position as the 3rd largest consumer market behind US, China.
CREDAI chairman Jaxay Shah said, “The correlation between the growth of some of the most developed economies and Realty has been well established for years and this report also echoes that. With our current government, we all are dreaming of a vision of a New India which is full of opportunities and implies progressive growth for businesses, homebuyers and the community at large and we at CREDAI are committed to transforming realty to achieve that.”
On the occasion of the unveiling of the report, CREDAI president, Satish Magar said, “India continues to remain a high-priority market for its long term growth potential as is evident from the increased investment flows in the last few years. Government’s 5 trillion-dollar mission & vision of a ‘New India’ imply that top industries contributing to our economy like Real estate need to usher in transformative measures which can help shape these goals. This report is a milestone in this direction as it not only determines the trends which need to be leveraged but also presents an analytical view on the next decade where we can achieve even more if we work towards developing a new workplace strategy, integrated transport systems, expand affordable housing and a renewed focus on application of sustainability in everyday life.”
CREDAI’s president elect Harshvardhan Patodia, said, “CREDAI NATCON is an experiential and interactive platform for its fraternity members, fellow developers and colleagues to learn the know-how of the trends and global best practices permeating the industry and the sector. The theme resilience to excellence compliments well with the present state of the Indian Real Estate industry that has merged the resilient phase, slow and disrupted but steady with a wave of upward and positive growth in the times to come.”
While releasing the report, Anshuman Magazine, chairman and CEO, India, South East Asia, Middle East and Africa, CBRE, said, “In the wake of positive policy reforms and the emergence of a strong workforce, the momentum of India’s economic growth is steady and it will only grow stronger in the next 10 years. The factors which will further facilitate this growth trajectory are investment, improved governance, human capital upgrade, improved connectivity, infrastructure enhancement, strengthened institutions (governance, administration and law), policy reforms and integrated sustainability of the entire ecosystem.’
Here are the key trends listed in the report:
*Bringing woman workforce to boost labour force participation – India’s Labour Force Participation Rate (LFPR) was only 51.9% in 2018, a sharp decline from 55.8% in 2008. The drop was primarily due to comparatively lower female participation in workforce, especially in rural areas
*Reduce international migration from India to widen in-house talent base - The total number of workers who have migrated from India has declined since 2015 due to the economic slowdown in the Arab countries, where the largest chunk of Indian migrants resides. Given the skill sets of these migrants, their presence in India would contribute significantly to the entrepreneurial evolution in the country over the next 10 years
*More than half of Indian workers will require reskilling by 2022 to meet future talent demands. In order to keep up with the demands of its young populace, India would have to focus on education, skill development, innovation, productivity enhancement and technology adaptation
*By 2030, India’s urban population will contribute as high as 75% of the GDP, up from 63% at present. However, this projection can only become a reality if the pressures on the physical and civic infrastructure systems of our cities is eased. Most Indian cities lag on key quality of life parameters and are plagued by challenges such as poverty, lack of affordable housing, traffic congestion, overcrowding, environmental degradation and air pollution
*Infrastructure is vital for the creation of liveable cities - India needs to spend 7-8% of its GDP on infrastructure annually to boost public and private investment in infrastructure.
*Scale of development in residential households - The number of households is expected to surge with close to 386 million households and almost 40% of Indians being urban residents by 2030. The scale of development is likely to change significantly as from mere standalone buildings, developers are expected to venture into integrated townships, theme-based townships, developments linked to economic activity and even self-sustaining mini townships/cities
*By 2030, residential real estate has the potential to almost double from the current stock of 1.5 million units in key cities. The increasing millennial and generation Z population is expected to be account for 77% of the overall working population in India by 2030. The housing needs of these such population groups are slightly unique. They look for convenience, service and a frictionless experience while buying/leasing a residential property
*Demand will remain concentrated in the affordable segment and will gradually shift towards the mid-end segments. Affordable housing will remain the dominant segment in the coming years with a total of 10 million PMAY (U) units to be delivered by 2020 itself
* Office stock to grow from 600 mn sq-ft in mid-2019 to a billion sq-ft by end of 2030 and flexible to become mainstream – comprise 8-10% of the total office stock
* Warehousing stock to touch 500 mn sq-ft by 2030 and share of grade A stock to witness continuous increase
* By 2030, 9 out of 10 Indians over the age of 15 will be online and retail shopping centre stock to cross 120 mn sq-ft by 2030.
Key dignitaries such as Benjamin Netanyahu, Prime Minister Israel, Dr Yifat Shasha-Biton, Honourable Minister of Construction & Housing of Israel and Member of Knesset, Ron Huldai, Mayor of Tel Aviv and Avraham Albert Benabou Former Israeli Diplomat and First Israeli to the Peace Keeping Forces of the United Nations graced the event with their presence.