RICS INDIA:On account of rapid urbanization with over 40% of the population expected to inhabit Indian cities by 2020 as compared to the current 28%,
The Government has recognised and indicated Indian housing as a priority sector and in spite of the housing shortfall, increasing pressure on land and infrastructure; housing in India continues to account for almost 80% of the real estate market, in terms of volumes.
Build a sustainable future
Therefore, it should not just be the prerogative of the government but also that of private Indian developers to address the challenge of affordability, technology and capacity constraints in infrastructure and housing development in order to build a sustainable future.
Corporate social responsibility
Therefore, it is absolutely imperative that Indian developers realise their corporate social responsibility and understand that business bottom lines are not the only operational and social concerns. By far, affordability is one of the biggest challenges and there is no denying that high Indian property prices have affected coordinated economic development and social harmony. In the recent past, prices have continued to escalate well beyond the reach of a majority of urban Indians with the focus predominantly being on high-value high-margin developments rather than high volumes, low margins. This establishes the need for developers to increasingly focus on volumes and not prices, in order for a stable and sustainable Indian property market to emerge.
Enormous opportunity in affordable Indian housing
To this end, the private sector needs to realise the enormous opportunity that exists within affordable Indian housing. So while the Government continues its efforts to reform the market and facilitate participation for improved delivery of housing, developers must embrace new technologies and materials that aide in time and cost reduction, which in turn can leverage returns through higher volumes. Also, in the absence of an Indian real estate regulatory authority and an appropriate consumer redressal forum, I believe that the onus should lie with developers in not being too ‘short sighted’ on corporate profits and should instead focus on the long term stability of a property market that is capable of attracting foreign investment and is an engine for economic growth.
Environmental sustainability
Environmental sustainability is another aspect that developers need to embrace with open arms, especially in today’s world. Several Indian real estate companies during the development and construction process tend to ignore the laws of nature leading to growing ecological deterioration. We are well aware that buildings account for a large portion of carbon emissions, production of water effluents and solid waste and considering if these ‘bye-products’ of development are not addressed through the entire property life cycle, catastrophic consequences are to be faced – sooner rather than later. With such a bleak future, so blatantly staring us in the face, the Indian realty sector has to be at the forefront of the shift towards sustainability, highlighting the need for sustainable development techniques and tools to be incorporated in the design, construction, operation and deconstruction phases.
Professional formal education needed
This is definitely an aspect that will require realty professionals to upgrade their skills and knowledge to cater to inclusive and passive development. However, this is not the only aspect where the sector is facing a severe resource crunch. And while it might be true that the real estate sector has only developed over the course of the last decade, the truth of the matter is that our educational framework does not cater to the realty segment, where increasingly it is found difficult to attract and retain qualified professionals/talent and where demand is completely outstripping the supply of professionals. This establishes the need for professional formal education and also the need to train and retain employees that are capable of displaying higher levels of competencies, ethics and adherence to building standards. Specifically with respect to building standards – this aspect has gained all the more significance, given the uncontrolled and rampant growth of unauthorised structures that continue to mushroom all over India in blatant violation of building codes and safety standards, resulting in the loss of life and property.
Need to implement the National Building Code
Thus, there is an urgent need to implement the compliance to the National Building Code, the so-called Bible of the construction industry. Also, adequate safety measures need to be voluntarily and mandatorily advocated by developers, given that most construction workers loose their life in ‘on-site accidents’ as a consequence of inadequate safety measures being implemented during the construction process, coupled with the lack of awareness, training and negligence of workers and project managers alike.
Bring together the ‘best-in-class’
All these factors along with numerous others, in my opinion, should be adequate triggers for the Indian real estate sector to be sensitive to the social dimension of not only housing but also over-all real estate development in India. Not only is there a need for appropriate pricing and strong ethical practices, but Indian developers should also plan carefully as well as strategically to meet the demands of consumers and provide quality urban services, which can only be achieved through the bringing together of all the ‘best-in-class’ elements that conceptualize, plan and execute successful integrated development projects.
Tags: property in India, Real estate in India, RICS India
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