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Forecast of the development of the real estate construction market in India

Forecast of the development of the real estate construction market in India Forecast of the development of the real estate construction market in India
Release date 10.02.2022
Number of pages 40
Formats DOCX, PDF
Cost 45000 ₹

The relevance of research

The spread of coronavirus infection, the decline in oil prices, the devaluation of the rupee - all these events have had a negative impact on the vast majority of companies in India. The construction industry, like many other economic activities, has faced many problems: reduced demand, suspension of activities, increased cost of building materials, financial problems for both companies and contractors, problems with the movement of workers due to border closures and other


Purpose of the study

Analysis of the state of the real estate construction market in India, assessment of the market size, analysis of competitors, as well as identification of factors affecting the real estate construction market


Content

Chapter 1. Key components of the real estate construction market

1.1. Market size
1.2. The growth rate of the real estate construction market
1.3. Real estate construction market trends
1.4. The main problems of the industry
1.5. Stage of the life cycle of the real estate construction market
1.6. Estimation of the number of buyers and their financial capabilities
1.7. Estimated consumption per capita
1.8. Analysis of sectoral indicators of financial and economic activity
1.9. Price analysis

Chapter 2

2.1. Economic components
2.2. Social Components
2.3. Technological components
2.4. Political Components
2.5. STEP-analysis of the real estate construction market

Chapter 3. Assessment of the degree of competition

3.1. Scale of competition (local, regional, national, global)
3.2. Number of competitors and relative market shares of the largest competitors
3.3. Compact location of industry companies in certain regions

Chapter 4 Industry Forecasts

4.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
4.2. Analysis of the impact on the state aid industry at the current date
4.3. Assessment of the degree of impact of the crisis due to covid-19 on the analyzed market. Barriers existing in the real estate construction market
4.4. Prospects and growth drivers for the real estate construction market
4.5. Forecast for the development of the real estate construction market in the context of the current economic crisis due to covid-19

Chapter 5 Forecasting Methodology

5.1. Methods for forecasting key industry indicators
5.2. Sources of information for forecasting
5.3. Timing of forecasting


Research excerpt

Chapter 1. Key components of the real estate construction market

1.1. Market size   

The spread of coronavirus infection, the decline in oil prices, the devaluation of the rupee - all these events have had a negative impact on the vast majority of companies in India. The construction industry, like many other economic activities, …
At the end of 2020, the volume of the real estate construction market amounted to … billion Rs. The industry in question is one of the largest and most fundamental in the Indian economy. The volume of GDP in 2020 at current prices is equal to … billion Rs. The share of the real estate construction market was estimated at …% of GDP.

1.2. The growth rate of the real estate construction market   

The growth rates of the market in the period of 2016-2020 allow us to state that the real estate construction market in value terms is almost …
On the one hand, despite the crisis of 2020, as well as due to the “low base” of 2019, at the end of 2020, the market volume was …% and amounted to … trillion Rs. The indicator for 2020 exceeds the level of the 2016 crisis year by …%.

At the same time, it should be noted that, on the other hand, even at current prices (including the inflation component), the market in 2020 …

Diagram 1. Dynamics of the volume of the real estate construction market, 2016–2020, billion Rs.

Since prices in the real estate construction market tend to increase, the real growth rate is …: in 2020, the real growth rate was …% compared to 2019, while the growth against 2018 was …

1.3. Real estate construction market trends
...

1.4. The main problems of the industry   
...

1.5. Stage of the life cycle of the real estate construction market

On the one hand, the real estate construction market is very multifaceted, because …
On the other hand, it can be noted that the total real estate construction market is at the stage of ... the life cycle. At the same time, the quality of the final objects is ...
Real estate construction services from the category …
At this stage, the role of ...
At the stage of maturity, the main task of marketing activities is to extend the life cycle and involves: ...

1.6. Estimation of the number of buyers and their financial capabilities   

The final consumers in the real estate construction market can be … It can be noted that the demand of organizations for commercial real estate to a certain extent depends on …
For example, let's analyze the indicators that characterize the demand of the population.

During 2010-2018, there was an increase in the population. The growth of …% in 2015 compared to the previous year 2014 is due, in addition to natural growth and growth due to migration, by joining ... However, at the beginning of 2018, the population growth rate fell …% compared to the previous year 2017, in 2019 (as of 1.01.2019 ) population growth …

According to the forecast for the period up to 2024, the population will increase only when following ..., however, in the light of the economic crisis and the coronavirus pandemic, this forecast option ...

Consider also such a value as the real incomes of the population, which determine the level of effective demand. Diagram 5 shows the dynamics of the growth rate of this indicator.
From 2014 to 2017, there is a downward trend in real incomes of the population and living standards. In 2014, the real incomes of the population fell by …%, in 2015 – by …%, and in 2016 … But in 2017 we can observe …%. …

According to Rosstat data, in the 1st quarter of 2020, the index of real disposable income of the population amounted to …% compared to the 1st quarter of 2019. But already for the 2nd quarter, the indicator was equal to …% by the 2nd quarter of 2019. Despite the quarantine measures...
This trend leads to a general reduction in demand in many sectors of the economy, both from end consumers (B2C segment) and from companies (B2B segment).
According to preliminary data for the whole of 2020, real incomes of the population fell by …%, the index amounted to …% by 2019.
...

Thus, both indicators characterizing the dynamics of the overall level of final demand for goods and services are characterized by …

1.7. Estimated consumption per capita

The volume of consumption is calculated by GidMarket on the basis of the volume ratio ... Annually, each inhabitant of India accounts for at least … thousand Rs. real estate construction.
The indicator tends to … except for … years. In 2020, consumption amounted to … thousand Rs./person, which is …% higher than the level of 2019, and …% higher than the level of 2016.

1.8. Analysis of sectoral indicators of financial and economic activity
Important data for analyzing the state of the industry is the dynamics of such indicators as profitability, liquidity, and business activity.
The table shows the dynamics of the gross profit margin (the ratio of gross profit to income).
During the period under review from 2015 to 2020, the dynamics of the gross margin in the real estate construction industry tended to ... Gross margin …% in 2015 to …% in 2020.
Nevertheless, throughout the entire period, the gross margin in the industry under consideration was significantly … the level in all sectors of the economy, which is … At the end of 2020, the difference amounted to … p.p.

Consider the dynamics of profitability before tax.

Diagram 7. Profitability before tax (profit of the reporting period) in the real estate construction industry in comparison with all sectors of the Indian economy, 2016–2020, %

In general, over the period, the profitability of profit before tax in the real estate construction industry increased from …% in 2016 to …% in 2020. At the same time, the work of the industry is difficult.

Consider liquidity indicators in the real estate construction industry. The indicator of current liquidity is a measure of the solvency of the organization, the ability ...
The estimated indicator of current liquidity of a normally operating solvent legal entity should be ...
If the current liquidity ratio is greater than 2, this indicates that the company has current assets ...
At the same time, in world practice, the coefficient in the range of …
For the industry under consideration, during the period from 2016 to 2020, the total coverage indicator was ... times, with the exception of 2018, when the indicator is ... times. The annual value of current liquidity ..., this indicates ... However, according to the standards of domestic and foreign practice in 2016-2020, the indicator ...

A more stringent liquidity criterion is the absolute liquidity ratio. He shows, …
The normal value of the absolute liquidity ratio fluctuates within ... Such a value of the absolute liquidity ratio means ...
The table shows the dynamics of this coefficient.

During the period under review, the overall indicator for all sectors of the Indian economy did not fall below ..., which indicates a sufficient level ... In the real estate construction industry, the indicator is ..., but does not correspond to ... - the minimum was noted in ... year - ..., and the maximum in 2018 - ... times.

Business activity is the ability of an enterprise, based on the results of its economic activity, to take a stable position in ...
The dynamics of the indicator in the period from 2016 to 2020 was almost linear, the maximum was observed in 2020 - … days. days Compared to the pre-crisis period (…), the indicator increased in 2020 by …%, which is ...

The stability of the financial position of the enterprise is impossible without effective management of working capital, based on ...

The equity ratio characterizes the availability of own working capital of the enterprise, necessary for ...
The total working capital ratio for all sectors of the economy in India in 2016-2020 as a whole showed dynamics towards ... But the indicator for the real estate construction industry, although it met the standard, was ... - ...% in 2020.
In this way, …

1.9. Price analysis   

The dynamics of prices for real estate construction in the period from 2016 to May 2021 had a linear character - the indicator annually …, as evidenced by …%.
Prices grew most rapidly in … year – CPI amounted to …%, in 2020 …
...
Prices for construction services are reflected in the prices for …

Table 4. Average prices in the real estate construction market (average price per 1 sq. m of the total area of ​​apartments in the primary market) across the Union Territories in 2016-2020, Rs./sq. m

According to …, the highest prices for residential real estate (in the market of new buildings) are observed in … the Union Territories, which is due to the indicator of …
Also, high prices in … Union Territories, which is mainly due to …

The top three also includes...
On average in India, residential real estate cost … thousand Rs./sq. m in 2020, which is …% more than in 2019 and by …% more than in 2016.
...

Chapter 2   

Macroeconomic factors influence the dynamics of all sectors of the Indian economy, including the real estate construction market. The main groups of factors are: economic, political, social and technological.

2.1. Economic components   

GDP (gross domestic product) is used to determine the rate of economic development of any state. GDP is a macroeconomic indicator that reflects...
Chart 11 shows India's GDP growth rate from 2007 to 2020 at comparable prices (at 2016 prices).
The impact of the crisis, which began in 2008, led to a decrease in GDP by …% in 2009, but then the growth rates were quite high until 2012 inclusive.
Further, until 2014, the growth rate was positive, but constantly …
In 2016, GDP stagnated, at the end of 2017 this indicator shows a positive trend, namely …% compared to the previous year.
...
The volume index of gross domestic product in 2020 amounted to …% compared to 2019.

2.2. Social Components   
...

2.3. Technological components
...

2.4. Political Components   
...

2.5. STEP-analysis of the real estate construction market
Let's combine the conclusions on the influence of factors within the STEP-analysis.

Table 11. STEP analysis of factors influencing the real estate construction market

According to the results of the performed STEP-analysis, macro-environment factors have a greater influence on the real estate construction market.
Such economic factors as … have a negative impact on the development of the market. Complicates the development of the market decline ...
… have a positive impact on the development of the studied market.
A group of economic factors has an ... influence on the market, other groups of factors have an effect on the market ...

Chapter 3. Assessment of the degree of competition   

3.1. Scale of competition (local, regional, national, global)   
...

3.2. Number of competitors and relative market shares of the largest competitors
The construction real estate market in India is one of the most … based on the number of companies operating in it.

Diagram 15. Shares of the largest competitors in the real estate construction market in 2020, %

The leaders of the real estate construction market in 2020 included: ... with a share of about ...%, Holding ... with a share of ...%, JSC ... with a share of ...%, JSC ...

Top-5 companies occupy …% of the market, other participants account for almost …% of the market. The market is extremely… - Herfindahl-Hirschmann index…
The total revenue of the market leaders tends to ... In 2020, the indicator amounted to ... billion Rs., which is ...% higher than in 2019 and ... The pace of development of the leaders exceeds the dynamics of the market volume, which indicates ...

3.3. Compact location of industry companies in certain regions

Diagram 17. Compactness of location of companies in the industry in certain regions in 2020, %

More than …% in terms of revenue and almost …% in terms of the number of companies account for the … federal district, and …% and …% in the market structure by regions, respectively, fall only on …
In second place in terms of revenue is … the Union Territories with a total share of …%, of which …% of revenue falls only on …
In second place in terms of the number of companies -..
The lowest indicators in the market structure are in … districts.

Chapter 4 Industry Forecasts   

4.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)

In the first half of 2020, the real estate construction market, like many other industries, felt the impact of the pandemic and the onset of the economic crisis.
Let us analyze data on the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014).
Analysis of the impact of crises in a complex throughout the real estate construction market is significantly difficult due to the huge variety ...

Table 13. Assessment of the impact of recent crises on the industry (on the example of residential real estate)

Buyers in the residential real estate market are the first ...
If we consider the segment of commercial real estate, then experts say that the real estate market lives …

...
In the office segment: if the previous crises …, then the current market situation, …

4.2. Analysis of the impact on the state aid industry at the current date
...

4.3. Assessment of the degree of impact of the crisis due to covid-19 on the analyzed market. Barriers existing in the real estate construction market
...

ДDiagram 19. Problems faced by construction companies during the 2020 crisis, %

The crisis of 2020 affected …% of developers. At the same time, no more than …% of companies noted that they were able to solve …

4.4. Prospects and growth drivers for the real estate construction market
...

4.5. Forecast for the development of the real estate construction market in the context of the current economic crisis due to covid-19
...

Chapter 5 Forecasting Methodology   

5.1. Methods for forecasting key industry indicators   
...
5.2. Sources of information for forecasting   
...
5.3. Timing of forecasting
...


Diagrams

Diagram 1. Dynamics of the volume of the real estate construction market, 2016–2020, billion Rs.
Figure 2. Stage of the life cycle of the real estate construction market
Diagram 3. Population dynamics in India as of January 1, 2010-2021, million people, %
Diagram 4. Population forecast in India for the period 2021-2024, million people
Diagram 5. Dynamics of real incomes of the population of India, 2011 - 2020, % to the previous year
Chart 6. Consumption in the real estate construction market per capita, 2016–2020, Rs./person
Diagram 7. Profitability before tax (profit of the reporting period) in the real estate construction industry in comparison with all sectors of the Indian economy, 2016–2020, %
Diagram 8. Current liquidity (total coverage) for the real estate construction industry for 2016–2020, times
Diagram 9. Business activity (average term of receivables turnover) in the field of real estate construction, for 2016-2020, days days
Diagram 10. Financial stability (security of own working capital) in the field of real estate construction, in comparison with all sectors of the Indian economy, 2016-2020, %
Diagram 11. Dynamics of India's GDP, 2007-2020, % to the previous year
Chart 12. Monthly dynamics of the US dollar against the rupee, 2015-2021 (Jan.-May), Rs. for 1 US dollar
Chart 13. Index of physical volume of retail trade turnover in India, 2014-2020, % of the previous year
Chart 14. Dynamics of the size of the average interest rate on loans, 2015-2020 (Jan-Nov), years, %
Diagram 15. Shares of the largest competitors in the real estate construction market in 2020, %
Chart 16. Dynamics of the total revenue of the largest real estate construction market operators (TOP-5) in India, 2016–2020, billion Rs.
Diagram 17. Compactness of location of companies in the industry in certain regions in 2020, %
Diagram 18. Dynamics of the volume of the real estate construction market in India in 2006-2020, billion Rs.
Chart 19. Problems faced by construction companies during the 2020 crisis, %
Diagram 20. Forecast of the volume of the real estate construction market in 2021–2025, billion Rs.


Tables

Table 1. Gross margin of the real estate construction industry in comparison with all sectors of the Indian economy, 2015-2020, %
Table 2. Absolute liquidity of the real estate construction industry in comparison with all sectors of the Indian economy, 2015-2020, times
Table 3. Consumer price indices in the real estate construction market in India in 2016–2021 (Jan-May), %
Table 4. Average prices in the real estate construction market (average price per 1 sq. m of the total area of ​​apartments in the primary market) across the Union Territories in 2016-2020, Rs./sq. m
Table 5. Forecasts of various sources for real GDP in India in 2021-2023 (data for January-June 2021), %
Table 6. Average producer prices and CPI for electricity at the end of the period in 2017-2020, rupees, %
Table 7. Urban and rural population in India in 2014-2020 (as of January 1), million people, %
Table 8. Producer price indices for construction products in 2017 - 2020, % compared to December of the previous year
Table 9. Opportunities and limitations of import substitution in the construction industry
Table 10. Weighted average interest rates of credit institutions on credit operations in rupees, excluding PJSC Sberbank (% per annum), 2015-2020 (Jan-Nov)
Table 11. STEP analysis of factors influencing the real estate construction market
Table 12. Main companies participating in the real estate construction market in 2020
Table 13. Assessment of the impact of recent crises on the industry (on the example of residential real estate)
Table 14. Analysis of the impact on the industry of the state aid proposed to date
Table 15. Forecast indicators of the development of the Indian economy until 2024 (base case), units rev.


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