At a time when other sectors are facing gloomy prospects, the real estate and construction sectors are under the spotlight for showing promising growth in the GDP numbers released on Friday.

While the country’s growth was at its lowest ebb in three years in the quarter ended in June, at 5.5 per cent, both these sectors have shown an upswing, with real estate growth pegged at 10.8 per cent and construction at 10.9 per cent.

Industry analysts and market players say that this growth can be attributed to two key reasons – execution of delayed projects and real estate being considered a safe investment in times of economic crisis.

Pradeep Jain, CMD, Parsvnath and Chairman, Confederation of Real Estate Developers’ Associations of India, said execution of existing projects would have added to the numbers despite not many new projects coming up.

With high inflation cutting into household budgets, consumers have tightened their purse strings. However, real estate is one asset class which was possibly growing due to the “emotional security” that it provided to investors, said DLF’s Executive Director, Rajeev Talwar.

Industry players also give some credit to the Government’s efforts of working to reduce the costs of funding in the realty sector.

Arvind Nandan, Executive Director, Consulting, Cushman and Wakefield, noted a marginal rebound in the market. “Occupancy is improving and construction activity is in sync with the demand. There is early indication of recovery and this could have shown in the GDP numbers,” he added.

Developers, by and large, have realised that the way to ease the liquidity situation was to continue with development. Amit Bhagat, CEO, ASK Property Investment Advisors, said there was is an over-leveraging situation.

“Developers are spending on construction and focused on timely deliveries. Hence, there is more supply and it’s turning into a buyers market from a sellers market,” he added

> bindu.menon@thehindu.co.in

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