The real estate sector plays a significant role in the country's economy. The real estate sector is second only to agriculture in terms of employment generation and contributes heavily towards the gross domestic product (GDP). Almost five per cent of the country's GDP is contributed to by the housing sector. In the next five years, this contribution to the GDP is expected to rise to 6 per cent. According to industry players, housing accounts for 4.5 per cent of gross domestic product (GDP) with urban housing accounting for 3.13 per cent.
According to Jones Lang LaSalle CEO, Colin Dyer, faster economic growth in Brazil, Russia, India and China (BRIC) could result in the property markets of those nations recovering at a faster rate than the UK and US real estate markets. It has also been suggested that India's property sector could begin to improve from late 2009 and may attract up to US$ 12.11 billion in real estate investment over a five-year period.
Moreover, the real estate sector is also responsible for the development of over 250 ancillary industries such as cement, steel, paints etc. A study by rating agency ICRA shows that the construction industry ranks 3rd among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy. A unit increase in expenditure in this sector has a multiplier effect and the capacity to generate income as high as five times.
Residex, an index planned to benchmark the housing sector and expected to serve as an indicator of property prices, the housing start-up index (HSUI) planned by the Reserve Bank (RBI) of India aims to indicate the volume of construction taking place in a particular location. The RBI also expects to publish the data by March 2010 for every quarter. HSUI would also serve as a lead indicator of the economy's growth as more houses would require more input materials like cement and steel, labour and credit demand.
This index would be useful for developers as it would help know areas of oversupply. They can hence refrain from construction activity in those areas. In case of an oversupply in a particular location, consumers before investing would wait till prices fall.
According to Jones Lang LaSalle CEO, Colin Dyer, faster economic growth in Brazil, Russia, India and China (BRIC) could result in the property markets of those nations recovering at a faster rate than the UK and US real estate markets. It has also been suggested that India's property sector could begin to improve from late 2009 and may attract up to US$ 12.11 billion in real estate investment over a five-year period.
Moreover, the real estate sector is also responsible for the development of over 250 ancillary industries such as cement, steel, paints etc. A study by rating agency ICRA shows that the construction industry ranks 3rd among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy. A unit increase in expenditure in this sector has a multiplier effect and the capacity to generate income as high as five times.
Residex, an index planned to benchmark the housing sector and expected to serve as an indicator of property prices, the housing start-up index (HSUI) planned by the Reserve Bank (RBI) of India aims to indicate the volume of construction taking place in a particular location. The RBI also expects to publish the data by March 2010 for every quarter. HSUI would also serve as a lead indicator of the economy's growth as more houses would require more input materials like cement and steel, labour and credit demand.
This index would be useful for developers as it would help know areas of oversupply. They can hence refrain from construction activity in those areas. In case of an oversupply in a particular location, consumers before investing would wait till prices fall.
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