The real estate sector is also responsible for the development of over 250 other ancillaryindustries such as cement, steel, paints etc. A study by rating agency ICRA shows that theconstruction industry ranks 3rd among the 14 major sectors in terms of direct, indirectand induced effects in all sectors of the economy. A unit increase in expenditure in thissector has a multiplier effect and the capacity to generate income as high as five times. If the economy grows at the rate of 10 per cent, the housing sector has the capacity to growat 14 per cent and generate 3.2 million new jobs over a decade.
Rising income levels of a growing middle class along with increase in nuclear families,changing demographics of home buyers (the average age of a new homeowner in 2006was 32 years compared with 45 years a decade ago), and easy housing finance has led toa boom in the housing sector.According to 'Housing Skyline of India 2007-08', a study by research firm, IndicusAnalytics, there will be a demand for over 24.3 million new dwellings for self-living inurban India alone by 2015. Consequently, this segment is likely to throw huge investmentopportunities. In fact, an estimated US$ 25 billion investment will be required over thenext five years in urban housing, says a Merrill Lynch report.Furthermore, a booming Indian economy has had a cascading effect on demand for commercial property to help meet the needs of business, such as modern offices,warehouses, hotels and retail shopping centres.Growth in commercial office space requirement is led by the burgeoning outsourcing andinformation technology (IT) industry and organized retail. For example, the organizedretail industry is likely to require an additional 220 million sq ft by 2010.Moreover, growth is not restricted to a few towns and cities but is pan-India, coveringnearly all tier I and tier II cities. Market analysis pegs returns from realty in India at an2