The construction and the real estate industry significantly contribute to the Indian GDP. With approximately a growth rate of 16.5%, the construction sector will grow up to INR 42 Billion in 2022. And as for the real-estate sector, it is already the 3rd largest sector that brings economic growth to India. With the notion of growth in 2022, it is expected the market size will reach up to $1 Trillion by 2030. This sector will contribute approximately 13% of the Indian GDP. In 2022, there is a rise in construction projects in India Reshaping real estate .
The construction activity in India is rising due to various factors. With the government building new infrastructure every year and new businesses and industrial projects, more and more construction projects have started. Approximately 28 to 38 Kms of the road are constructed every day in India. Most of the big cities of India have infrastructure projects like metro and bullet trains. The is also an increase in demand for both residential and commercial real estate properties across the country. Because of low rates of interest in home loans, people purchased a lot of residential properties. And, with the slow and steady transformation of online work to offline offices, commercial properties are also being bought.
There are quite a lot of factors that contribute to the increase in construction projects in India. Let us discuss, a few vital reasons for this increase.
Factors influencing the rise in construction in India:
Demographic Distribution: Currently, as of June 2022, India’s population is 140 crores. Out of which, most of the population is young. The average population of India is in their late 20 indicating, that most of the people in India are newlywed couples. And common consumer behaviour is that most newlyweds buy houses. So, to meet the demands of such a large and young population, the rise in construction projects is an obvious move.
The boom of Start-ups and Businesses: With the make in India initiative and huge investments flowing into the start-up ecosystem in India, the demand for offices and commercial properties has also increased drastically. Up until May 2022, around 14 start-ups became Unicorns in India. Because of huge money coming into the Start-up and business sector, the rise in the construction of commercial properties is a result.
Development of Rural Areas: The development of rural areas of India is also rapid. With huge roads being built throughout India, the connectivity of villages is slowly improving. Moreover, now the people of rural India are moving from mud huts to properly constructed houses. New schools and hospitals are constructed.
FDI and Government Projects: Now for urban infrastructure, the Indian government has allowed 100% Foreign investment. It will create more inflow of money in the construction sector, facilitating the growth of construction activities in India.