19 Mai 2017
Within five years, there will be more individuals employed to either construct realestate in India or in industries ancillary to real estate than will be employed in any other industry in the country. However according to a survey by a staffing firm, during the April-September period, the real estate sector will add eight percent fewer jobs than it did during the October 2016 to March 2017 period. During the 2017 April to September period, the construction and real estate sector is expected to be the worst creator of jobs among the 16 sectors surveyed.
Putting Things in Perspective
In the construction and real estate sector, the hiring outlook has dropped by eight percent because of which it expected to add only 4.8 percent more jobs from April-September of this year. From October of last year until March of the current year, the employment outlook for the real estate sector stood at 78 percent. During the period of April to September of this year, the employment outlook is expected to fall to only seventy percent.
The Cause and its Unforeseen Effect
According to some of the best property websites in India, the reason the real estate sector and construction sector will only add 4.8 percent more jobs during the six months mentioned is linked to the lingering impact of demonetization. In early October of last year, the government banned high denomination currency notes and as an afterthought took steps that encouraged Indians to transact commerce using digital money instead of cash.
Among all the sixteen sectors surveyed, the real estate and construction sectors were the worst hit by demonetization. Sentiment in the real estate sector dropped to new lows after the highest-denominated notes were banned from circulation.
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More Reasons to Worry
Real estate industry veterans and other knowledgeable experts believe that the condition of the real estate sector is likely to get worse before it gets better. A credible reason for this viewpoint is that the soon to be rolled out Goods and Services Tax is likely to further dampen sentiment in India’s real estate sector.
The RERA, having already been enacted by many states is leading to changes in the business models used by builders. However, many builders who in the short term will be adversely affected by the RERA also believe that the Real Estate Regulatory Act will be beneficial to them over the long term. In the short term, builders have had to rethink their business model because of the RERA.
A Positive Sentiment Exists Over the Long Term
By the year 2030, the revenue generated by the construction industry is expected to be greater than one trillion dollars or 66.5 lakh crore rupees each year. On its way to becoming a one trillion dollar industry, the construction sector, according to a reliable property website in India will generate 75 million jobs by 2022 employing more people than any other sector in India