The Real Estate Construction Industry is an important pillar of the Indian economy. It consumes vital inputs such as Cement, Steel, Bricks, etc,. Provides employment to Lakhs directly and indirectly and is working toward fulfilling our beloved Prime Minister’s goal of providing dignity to the aspirations of thousands of our country’s citizens by Constructing affordable housing.
The Construction Industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy. In India, the Real Estate sector is the second-highest employment generator, after the Agriculture sector.
By 2040, Real Estate market will grow to Rs. 65,000 crore (US$ 9.30 billion) from Rs. 12,000 crore (US$ 1.72 billion) in 2019. Real Estate sector in India is expected to reach a market size of US$ 1 trillion by 2030 from US$ 120 billion in 2017 and contribute 13% to the country’s GDP by 2025.
The Residential sector is expected to grow significantly, with the Central Government aiming to build 20 million affordable houses in urban areas across the country by 2022, under the ambitious Pradhan Mantri Awas Yojana (PMAY) scheme of the Union Ministry of Housing and Urban Affairs. The current shortage of housing in urban areas is estimated to be ~10 million units. An additional 25 million units of affordable housing are required by 2030 to meet the growth in the Country’s Urban population.
The gap in dreams to be delivered is large. However, runaway inflation in prices of vital inputs threatens to derail any improvement in sentiment in the real estate sector.
Just since the beginning of this month domestic wholesale steel prices have seen a hike of 4.5-6.2% from the beginning of the current month. The prices doubled in the last one year. Cement prices too have moved higher by more than 50% during this period. The price of diesel has increased 34 percent year over year, owing to a rise in crude oil prices and an increase in government taxes which would impact cement manufacturers freight costs.
To top it all, the COVID-19 pandemic has had a devastating impact on our industry in terms of: overall demand reduction, delays in project completions due to stoppages as a result of lockdowns, reduced earnings for labor and therefore reduced spending by labor. The impact of these problems has also affected more than the 250 industries that are linked to the real estate sector including ones such as caterers and small restaurants.
Although the Real Estate Industry is resiliently on a slow path towards revival despite two lockdowns, rising steel and cement prices are shrinking already low margins for real estate developers. If immediate policy measures are not taken, a hike in average property prices would be unavoidable. Some developers would be forced to, at least temporarily, abandon the construction of unfinished projects and cause untimely delivery to customers. Moreover, it will have a domino effect on the homebuyers as developers will be forced to hike the prices of the projects due to this reason the Dreams of having own Dwelling may remain beyond reach if the Builder hike the price. While members of CREDAI Belagavi are appreciative of several initiatives to encourage development in the sector taken by the Government of India along with the governments of respective States,the real estate sector seeks immediate relief for its survival which is not just desirable, but rather crucial for the economy given its share of the economy.
Members of CREDAI Belagavi demand immediate consideration of policy measures to provide relief to the crucially important Real Estate Sector.
-President and Secretary
Credai Belagavi.
ಪ್ರಗತಿವಾಹಿನಿ ಸುದ್ದಿಗಳನ್ನು ನಿಮ್ಮ ಸ್ನೇಹಿತರಿಗೆ, ಬೇರೆ ಗ್ರುಪ್ ಗಳಿಗೆ ಶೇರ್ ಮಾಡಿ
