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Uttar Pradesh has topped in new investments in real estate sector, garnering 40 per cent share.
However, the state is sluggish in project completion with not a single realty project completed since March 2012.
UP clocked 57 per cent year-on-year growth in realty and attracted 40 per cent of new investment among top 20 states in India during the first quarter of the current financial year.These facts emerged in a study by Associated Chambers of Commerce and Industry of India (Assocham).
Interestingly, new investments in realty sector dipped by 50 per cent over the past year with top 20 states attracting new investments worth over Rs 11,905 crore in Q1FY13 against Rs 5,884 worth of investments in Q1FY14.
UP attracted new investments in real estate sector worth Rs 2,350 crore in Q1FY14 against Rs 1,500 crore new investments during corresponding period of the last year.
"However, timely completion of ongoing projects has remained a major concern in UP, which has not witnessed completion of any real realty project since March 2012," Assocham Secretary General DS Rawat lamented.
Realty projects worth Rs 2,971 crore got completed during Q1FY14 across India, registering 50 per cent growth in rate of project completion as projects worth only Rs 1,976 crore had been completed in Q1 of the previous financial year.
"With a share of 10 per cent in total outstanding investments worth over Rs 14 lakh crore attracted by top 20 states in the real estate sector as of June 2013, UP ranks fifth with outstanding investments worth Rs 1.4 lakh crore in realty," Rawat added.
Rapid urbanisation, positive demographics, growing nuclear families trend, rural-urban migration, infrastructure development, rising income levels and growing housing demand are driving realty in India as the sector contributes 6.3 per cent to India's gross domestic product and annually generates eight million direct and indirect jobs.
So far, mostly tier I centres accounted for major chunk of real estate development. Now, there is need to take it to smaller cities to negate the growing housing demand-supply gap across the country.
Assocham has advocated for more foreign direct investment in real estate firms to strengthen industry in townships, housing, and construction development projects as that would generate economic activity and create new employment opportunities.
