Urban planning should not be restricted to construction of houses alone but must focus on generating jobs as well, said Manoj Joshi, Secretary, Ministry of Housing and Urban Affairs (MoHUA) on October 14.
“The real estate sector and urban planning will be one of the most important areas as India moves towards Amrit Kaal and becomes a developed country by 2047,” Joshi said at the CII Annual Conclave on Indian Real Estate. The conclave focused on key themes of resilient, adaptable and affordable real estate.
“There is a need to bring about a change in urban thinking so that we are not obsessed with construction of houses alone. Urban planning should focus on generating jobs as well,” he said at the Conclave.
The big drivers in tier 2 cities are jobs and education, with Surat and Pune being the biggest examples of this expansion, added Joshi.
“These two cities are growing much faster compared to their other counterparts and may even overtake old metropolitan areas as these are the cities that are generating jobs,” he said.
He mentioned that even in the case of land pooling in Delhi, the focus has been in the context of group housing, people buying shares into societies that are buying land for housing. It has a potential of constructing perhaps another 40 lakh units and much of that will come up as housing. "The focus instead should also be on creating jobs in these areas," he said.
The traditional understanding of real estate sector is that residential units sell much faster than commercial or office space sells better and hence the focus on residential. The Noida and Greater Noida phenomenon versus Gurgaon is a classic example, he observed.
“It’s time we consider bringing about a change in our urban thinking so that we are not obsessed with construction of houses only. We should talk about what models would work for office space, the services sector space. I am not sure if much discussion takes place on that. We are concerned about homebuyers, RERA, concerns of the real estate sector, but what drives urban areas is jobs,” he added.
Joshi also spoke about the immense scope for industry-government collaboration in water treatment and in overcoming the resistance to residential usage of treated-water in urban areas. On the theme of affordability, he argued for greater technology adoption as a means to affordable housing for all.
Addressing the Conclave, Anand Kumar, chairman, Delhi RERA, said the size of the Indian real estate sector was expected to expand from Rs 20,000 crore today to Rs 65,000 crore by 2050.
A CII-CBRE report on India Real Estate: Resilient, Adaptable and Affordable Report was launched at the event.
Anshuman Magazine, Chairman, CII Northern Region, and Chairman & CEO – India, South-East Asia, Middle East & Africa at CBRE, said that the real estate sector may do better next year depending on global trends but that does not mean that “we should be complacent.”
He said that Tier-II cities are poised to be the new growth vectors in India in the coming years - driven by their progress in real estate landscape, operating environment, quality of life and sustainability. These cities include Chandigarh, Jaipur, Lucknow, Coimbatore, Kochi, Thiruvananthapuram, Visakhapatnam among others.
HDFC Capital MD Vipul Roongta noted that demand for residential real estate in India will remain strong in the coming years despite the high interest rates due to the demographic dividend and buyers' relatively less reliance on home loans.
"The average homeownership age in India is 37 years and two third of India is still below the age of 35...So, obviously, there is going to be a serious demand," he said.
He observed that on average, the loan-to-value ratio that exists in residential mortgages does not exceed 68 percent. “That means 30-32 percent is coming as own contribution... one out of three homes don't take mortgages. So, there is a fair bit of non-reliance on the banking ecosystem,"
Sriram Khattar, Member CII National Committee on Real Estate and Housing and Managing Director, Rental Business, DLF, spoke about the resilience the Indian real estate sector has shown amidst the disruptions caused by the pandemic and the war in Ukraine.
“The demand for premium quality office space has risen significantly, especially from global corporates,” he said.