Realty sector to face shortfall of professionals

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SME Times News Bureau | 18 Nov, 2011
With India's population estimated to increase to 1.38 billion by 2020 leading to potential future growth of the real estate sector, the industry is likely to face a demand and supply gap of 44 million core professionals by 2020, a study said Thursday.

"By 2020, India's population is estimated to increase to 1.38 billion, with 500 million of urban population, which is estimated to generate unprecedented demand for quality real estate and infrastructure," said a report "Real Estate and Construction Professionals in India by 2020" by Royal Institution of Chartered Surveyors (RICS).

"A sustained period of shortfall in annual supply, coupled with an increasing year on year demand, could result in a cumulative demand of nearly 45 million core professionals, over 2010-20, with a cumulative demand-supply gap of approximately 44 million core professionals, over the same period," it added.

According to the report, almost 123 million of additional urban population is likely to require professional assistance for construction of houses by 2020.

"India would need nearly 4 million civil engineers, 396,000 architects and 119,000 planners on an average, over the next decade. However the corresponding average supply available would only be 642,000 civil engineers, 65,000 architects and 18,000 planners," the report said.

The report stated factors such as shortage of colleges and seats, orthodox academic structures with limited room to adapt to innovation and market needs, lack of trained faculty and availability of better pay scales in other fields and countries responsible for the gap.

RICS recommended the government to improve regulatory framework, consider passing Foreign Institutions Entry and Operations Bill, 2007 and allocating funds and incentives for skill development in critical area to increase annual supply of professionals and address skill-set gaps in existing manpower.

For private sector, it recommended encouragement of internships, collaboration with academia and professional bodies and investment in continues professional training and development of staff.

"The contribution of the built environment on the economy accounts for approx 17.5 percent of GDP (2009-10). With a projected area requirement of almost 95 billion square feet between 2010-20 across the real estate sector, manpower requirements becomes one of the most critical elements that will drive this growth," said Sachin Sandhir, managing director, RICS South Asia.

"Given that the industry is already beginning to be impacted by a demand-supply mismatch, the projected shortage of various built environment professionals becomes a cause for significant concern as it threatens the sustainability of high growth sectors of real-estate, construction and infrastructure," he added.