Economic Survey 2023-24: Outlook for real estate sector encouraging; terms stalled projects as challenging

Economic Survey highlights real estate sector's growth, challenges, and policy reforms to meet rising housing demand.

The Economic Survey has projected a positive outlook for the real estate sector with housing demand set to rise on rapid urbanisation, but described legacy stalled projects as a "challenge".

“Real estate and ownership of dwellings have accounted for over seven per cent of the overall GVA (gross value added) in the past decade, highlighting their integral role in the economy,” the survey said, which was tabled in the Parliament by Union Finance Minister Nirmala Sitharaman.

Economic Survey 2023-24: India’s growth back to pre-COVID trends, 7%-plus growth possible in medium term 

“The outlook for the real estate sector is encouraging. With increasing urbanisation, the housing industry is poised for a significant transformation,” the survey document said.

Stating that half of India's population is projected to dwell in urban regions by 2050 compared to 31% in 2011, the survey stressed the need to adapt strategies and policies to meet the rising demand for housing and offer viable, cost-effective and sustainable solutions.

The survey also pointed out that “the legacy stalled real estate projects is a challenge.” Approximately 4.1 lakh stressed dwelling units, involving ₹4.1 lakh crore, are affected as estimated by the Indian Banks’ Association (IBA).

The Ministry of Housing and Urban Affairs established a committee to recommend solutions for completing stalled projects to address this issue. The committee identified the primary cause of stress as lack of financial viability, resulting in cost overruns and delays, and has suggested various recommendations.