Real estate sector will contribute 10% of the GDP by 2030: Housing secretary

                Real Estate will contribute 10% of the GDP by 2030, according to Union Housing and Urban Aairs Secretary, Durga Shanker Mishra. Mishra was speaking on the launch of housing price index (HPI) in association with the industry 
body NAREDCO, which will enable homebuyers, investors, real estate developers and policymakers to track high-frequency price movement in India's key residential markets. “The Housing Price Index jointly developed by the Indian 
School of Business and Housing.com has the potential to emerge as a good indicator of the country’s real-estate market health. The real-estate sector has been impacted due to the COVID-led slowdown and overall uncertainty. At 
this time, it is essential to track the growth via credible sources that will help authorities make quicker and informed decisions during such exogenous shocks,” said Mishra.

According to the index, the cumulative price growth across the country has been 13 percent over 2017–2020. While the growth has been slow relative to the previous decade, the growth has further plummeted since mid-2019. Since
the COVID-19 induced lockdown, there has been a minimal increase in the prices. Quantitatively, the prices increased by only 1 percent during 2020, and the growth rate still has not returned to the pre-pandemic levels. “We have 
observed that the demand has already picked up in Q1 2021 and the sector has started to show signs of recovery,” Mishra said.

Online real estate portal housing.com with the global business school, Indian School of Business (ISB), said the HPI will provide monthly reports on price and quantity movement in various property markets across the country. 
According to the Gurugram-based digital real estate company, the HPI, created in association with the Indian School of Business’ (ISB) Srini Raju Centre for IT and the Networked Economy (SRITNE), aims to serve as a tool that 
tracks changes in residential home prices across India's eight major markets.

“Buyers as well as policymakers are mostly forced to rely on market anecdotes and guesswork about property price movements in Indian cities in the absence of quality high-frequency data, especially locality specic data. The
entire idea behind the launch of the Housing HPI is to address this issue. Aside from benetting buyers, investors and policymakers, data from our HPI will also be immensely valuable for real estate developers who are considering
a new locality to launch new developments. For real estate builders, having access to information such as this has become more crucial than ever now, with the demand landscape rapidly evolving due to the emergence of the
“work-from-home” concept in the wake of the COVID-19 pandemic,” said Dhruv Agarwala, Group CEO, housing.com.

By oering useful insights into price movement, the index could help a potential homebuyer assess the appropriate time to buy a property and at the same time assist sellers in knowing the most opportune moment to sell their
assets. Policymakers and nancial analysts can also use it as a reliable estimate to keep track of the trends in the sector.

Based on a survey of cities such as Ahmedabad, Bengaluru, Chennai, Delhi NCR (Faridabad, Ghaziabad, Gurugram, Greater Noida and Noida), Hyderabad, Kolkata, Mumbai and Pune from 2017 to the present, conducted every 
quarter, the Elara Technologies-owned company's HPI uses granular prices from localities and their corresponding weights based on transaction value share of that locality in India, basing its ndings on 1, 2, and 3-BHK apartments.

Data collected for this purpose include information on price per square foot, quantity, and the total value of transactions in the previous three months for various sub-localities within each city. It also includes other details such as
the number of bedrooms, construction status, and the number of inventory units. "It has been a long hauling grind for the Indian Real Estate sector to undergo a system reboot on the back of various structural policies introduced 
recently. In the current pandemic, the sector witnessed an increased use of and reliance on technology. The transition in the Digital Era has been quite phenomenal,” said Niranjan Hiranandani, National President – NAREDCO; 
Founder & MD - Hiranandani Group.

Source: The Economic Times