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The real estate sector has been witnessing a declining trend in big cities such as Bangalore, Kolkata and Chennai, while the growth is noticeable in smaller cities, labelled as tier-2 centres, like Dehradun, Bhopal and Hubli, according to the Housing Start-Up Index (HSUI), which was released on Monday.

HSUI, an indicator of volume of construction in the housing sector during a certain period, covered 27 cities across the country between 2009 and 2011. The index will cover 300 cities soon. The first-of-its-kind initiative is a critical indicator of economic growth in sectors like banking, mortgage, labour, steel, cement and paint.

India has joined a club of six developed countries – Canada, US, Japan, France, Australia and New Zealand – which have a housing start-up index.

The index showed a declining trend in the real estate sector in million-plus cities, while it indicated an upward movement in smaller cities.

Housing minister Girija Vyas said, “The contribution of realty sector is about 10% of the GDP and, hence, it is a key macroeconomic indicator. It will help both the private and the government sector in assessing economic activities in a region. It will also benefit consumers and promoters.”

She said such trends were useful indicators of the pattern of development in the country, which, in turn, would help policy-makers and administrators understand the future focus and thrust areas not only in terms of housing provision, but all the associated infrastructure and civic amenities required.

There are 254 ancillary sectors which are related to housing sector directly or indirectly like cement and iron. 30 million people are involved in the sector, which has an estimated market size of Rs 2.5 lakh crore.

Via : TOI