Real Estate To Contribute Over 15% To India’s GDP By 2047: Report

Backed by a healthy rise in the sales of upscale property indicating rising income, premiumisation along with strong demand, the real estate industry is set to contribute about 15 per cent to the country’s gross domestic product (GDP) by 2047, up from seven per cent currently, according to a report by Bank of Baroda (BoB). The increasing revenue receipts by the governments at the state level through the stamp duty collections are expected to pave the way for growth in the sector, as per the report.

The total stamp duty collection for the last ten years stands at Rs 13.7 trillion across 23 states considered for the sample. Maharashtra leads the way with a share of 23.4 per cent, followed by Uttar Pradesh at 13 per cent. Tamil Nadu (9.2 per cent), Karnataka (8.4 per cent) and Gujarat (6.7 per cent) take up the remaining three spots in the top five, respectively.

The study stated in the report took the dataset from the last ten years and divided it into two halves ranging from FY15 to FY19 and FY20 to FY24. The compound annual growth rate (CAGR) registered a sharp increase in the second half compared with the first half at the all-India level. The first half had a CAGR of 10.4 per cent, which jumped to 12.5 per cent in the second half. This indicates a boost in demand.

The rise in income level and increased interest towards home ownership has led to an enhanced stamp duty collection. However, the compound annual growth rate (CAGR) growth in stamp duty collections of Telangana, Bihar, West Bengal, Haryana, Odisha and Meghalaya has shown a downward trend in the last five years.

The report stated some factors which need to be taken into consideration while talking about stamp duty. The rates have changed over the years across many states and they tend to vary on property’s value. In addition, the higher numbers in the collection would also be due to the value of houses or property being higher, as per the report.

The outlook for the future appears positive as the rebate on stamp duty has been further extended which is expected to lead the demand in the sector on an upward trajectory. The prices of homes have also grown at differential levels and have contributed to the overall collections, the report stated.