Real estate sector is a key barometer of the Indian economy. It accounts for almost a fifth of our nation's GDP if we include the ancillary industries such as construction.[1] It is the second largest employment driver, next only to agriculture. There are multiple stakeholders spanning its value chain - land owners, developers, brokers/service providers, banks/financing entities, Government and consumers. According to the Ministry of Finance's Economic Survey (2011-12), the housing sector ranks third in its breadth of impact and fourth in its multiplier effect on the economy. It is estimated that for every rupee invested in housing and construction, Rs. 0.78 gets added to the GDP.
With time the industry has evolved; from localized family based entities with expertise in single products to corporate entities with presence in multiple cities and product lines. Also, the degree of regulation has increased, along with heightened awareness of opportunities and risks associated across the value chain, from land development, building, financing to sale of units in the primary market and secondary market. Indiscriminate growth and escalating land prices have skewed land acquisition programmes for many government projects. This has compelled urban planners to rethink current policies related to this value chain.
The recent global financial crisis, which has its origins in sub-prime mortgages in the US housing sector, underscores the critical need for good, timely research, to identify potential fault lines and evaluate possible solutions to ensure that similar events don't happen again. However, research efforts by industry experts, think tanks, academicians and policy makers have been impeded due to lack of credible data and opaqueness in some very basic attributes such as transaction prices, housing supply etc.
In June 2012, IIMB, with the help of Century, a leading Bangalore-based developer, established a research initiative (called "IIMB-CRERI") to address this shortage of credible data and research on Indian real estate. The initiative will complement work at IIMB's other leading Centres such as the Centre of Excellence in Urban Governance and Centre for Public Policy, and will reflect IIMB's long-standing reputation for high quality scientific and policy driven research.