Good news if you work in real estate — your salary’s probably going up

If you are looking for a job or already working in real estate, you may get lucky as companies are giving above average salary increases. This despite both the residential and commercial markets have not grown as aggressively as analysts or the industry have been hoping under the Modi-led NDA government.

“A lot of it is governed by macroeconomic factors and there’s less to do with the industry per se. For example, the GDP has not been very high which means surplus income at the household level has not changed much. This has resulted in lesser investments,” says Suryanarayanan R, a senior consultant for Aon Hewitt.

However, this sector will not see saturation anytime soon. That’s because real estate is an evergreen sector and Indians love to put their money there if they can afford it.

“As a result,” Suryanarayanan thinks “the official predictions for salary increases in this sector are too low.” He says the official prediction of 9.8% is “a cautious number which I see would reach around the India average of 10.3% in the next 12-18 months.”

For the infrastructure segment, the outlook is moderate and success will depend on the progress of factors like the Land Acquisition Bill, government clearances at a departmental level, and funding/payment clearance to the vendors along with speedy review and closure of tenders.

Meanwhile, attrition in real estate continues to be higher than overall in India which is a reflection of the growing sector and many opportunities available across the real estate sector. The infrastructure companies are observing a slightly lower rate of attrition given the current challenges the sector is facing.

“Key talent is not available on structural side in India, and so companies need to look outside India,” Suryanarayanan argues.

“Within the industry, if your genesis lies in the corporate houses, you will borrow practices from there when looking at talent retention/ rewards as opposed to pure real estate players who are still coming up the curve in this regard,” he says.

“That’s why there’s a clear trend with organizations moving towards a professionally managed approach, which has enhanced focus on people and people practices in the short term, leading to a clear impact on the overall morale, engagement, retention and growth opportunities for employees in the sector,” he adds.

Moreover, the emphasis on the improvement and enhancement of existing infrastructure across the country, with initiatives such as smart cities, housing for all by 2022, and so on, could create further opportunities for the real estate sector to grow. Additionally, the sector would get a strong boost if measures such as the land acquisition bill are passed to ensure that the urban infrastructure projects, highway corridors and all other projects which are dependent on easy availability of land can pick up pace.

Suryanarayanan says the demand for commercial spaces meanwhile has continued irrespective of the sector overall. “Despite an overall economic outlook being moderate, we continue to see continuous demand in this segment which is being driven by expanding organizations and global organizations setting up their offices in India,” he says.

However, one major challenge the big players may have to face is the movement of talent to regional players. “Unlike other industries, real estate is not controlled by handful big players. There may be 200 to 300 regional players. It is a very fragmented industry. Therefore, we will see spurt happening in pockets. Even as emphasis has always been on the tier 1 cities but there’s more focus on the tier II, III cities. Now, with the government announcing affordable housing for everyone by 2020, it’s going to drive demand at smaller locations. This may have several companies not doing well lose their talent to the regional players as demand there goes up,” Suryanarayanan says.