Real estate's share in GDP estimated at 6.3%: Report

Real estate sector is expected to generate 7.6 million jobs and contribute about 6.3% to the country's GDP in 2013, according to global property consultant CBRE.

By 2025, employment opportunities will increase by 17 million across the country by 2025, it said.

"The potential for development and growth in the real estate sector is tremendous. It is expected to generate over 17 million employment opportunities across the country by 2025, thereby making a significant contribution to the GDP," said Anshuman Magazine, CMD, CBRE South Asia Pvt Ltd.

In a report titled 'Assessing the Economic impact of India's Real Estate Sector,' the property consultant said India's real estate sector was estimated to have a total supply pipeline of close to 3.6 billion sq ft lined up for completion in 2013, with about 98 per cent of this being concentrated in the residential segment.

The total economic footprint generated by construction of this real estate pipeline will require a total investment of about Rs 254,000 crore, it said.

"The total contribution of the real estate sector to the national GDP has been estimated to be about 6.3 per cent in 2013 alone."

However, the sector faces several challenges including high borrowing costs, lack of institutional funding, lengthy approval processes and slow and uneven infrastructure development.

"The report portrays the conservative status of the sector's contribution. For the first time a detailed attempt has been made to give facts on its importance in terms of GDP, industrial production employment opportunities," said Lalit Jain, Chairman, Credai and Chairman and Managing Director, Kumar Urban Development Limited.

It has also listed a set of recommendations, which could assist the sector in achieving its full potential in the long-term. These include measures such as addressing supply constraints, streamlining the approval processes, permitting new sources of real estate funding and promoting private sector participation in the construction sector.