India, China, Asia Pacific, South and Central America, Middle East and Africa and parts of East Europe are set to see the most dynamic growth for construction in 2013, according to the Royal Institution of Chartered Surveyors (RICS).
China, India and Brazil are likely to drive in the highest real estate growth over the next decade, its latest insight report shows.
‘In these countries, the opportunities for infrastructure development and construction will be driven by increasing purchasing power, labour mobility, demands for higher living standards and major upgrades in transport systems, utilities and buildings,’ it points out.
‘China will be the world’s leading construction market by 2018. However, the construction growth rate will be higher in India. It is expected to touch the double digit in both the residential and non-residential markets on the short term basis,’ it adds.
This is happening because emerging markets are expected to grow by a110% to become a $7 trillion market, representing a massive 17.2% of GDP in 2020. Conversely, developed countries will only grow by 35% from $4.2 trillion today to an estimated $5.7 trillion market by 2020.
The report also points out that fiscal deficits in developed countries have constrained government spending and that along with austerity measures, rising raw material prices, a lack of availability of finance and weak consumer spending will keep them in the doldrums.
However, RICS says that signs of recovery give reasons to be optimistic. ‘Increased availability of capital and resurgence in manufacturing has already led to recovery in the commercial realty market worldwide. Investments in transportation, education facilities, highways, healthcare facilities, hotels and hospitality, government offices will further accentuate the construction growth,’ the report explains.
‘But, fiscal deficits and reduced government spending will continue to hold back construction growth in some of the developed countries,’ it adds.
RICS also points out that India is set to become the world’s fastest growing economy and likely to be the world’s third largest economy by 2030. India is home to 17% of the global population, but covers only 2.4% of the world’s geographical area.
Also 50% of India’s population is below 25 years old now, and the median age by 2030 will be 31, far below China’s 42 and Japan’s 52. A four fold increase is expected in per capita income in India by 2030.
Indian cities will generate 70% of the net new jobs created by 2030 and produce more than 70% of the country’s GDP and 56 Indian companies are on the Fortune 2,000 list, and three of the world’s top 10 outsourcing companies are from India.
India also ranks third in terms of attractiveness as a destination for Foreign Development Investment and investment of US$ 1.2 trillion is required over next 20 years to modernise urban infrastructure in India.
Via : PropertyWire