Page 51 - CONSTRUCTION VISION July August 2017 issue

REPORT

extent of urbanization, demographics, and industrial development on a large scale,” projections prove true, it's not the only
growth prospects,” says Baisiwala. For says China property analyst John Lam. “The industry that will benefit. “We believe that
instance, China notched $1.9 trillion in GDP skylines of some of China's biggest cities strong growth in the property sector over the
in 2004, compared to India's $1.8 trillion were agricultural land less than a generation next few years should translate into demand
GDP in 2015. The median age of China's ago.”There are some key differences for several adjacent industries, including
population in 2000 was 29, compared to between India and China. The Morgan housing finance companies and banks,
India's median of 27 in 2015. In 2000, the Stanley forecast of 6.75% GDP growth for construction, and consumer items, such as
percentage of China's urbanization rate, or India during the next 10 years is lower than paint,” says Baisiwala. “We expect these to
population living in urban areas, was 36%, the 9.7% growth China achieved in the past accelerate in volume terms over the next few
compared to India's 33% in 2015. 15 years. India's mortgage and inflation years.”
rates also are higher than China's were. Take the cement industry, for example.
Generational Jump Demand for cement in India grew at around
And while India has strengthened the federal 4% annually in recent years, but a 9%
From 2004, China's property sales market government's role in its real-estate market, compound annual growth rate in property
grew significantly. the country's investment in the Chinese government took an even larger volume could drive up demand for cement,
infrastructure increased 16% annually from role in the regulation of its property market. with annual growth accelerating to 5.5%-6%,
2004-13, culminating in $425 billion in Additionally, India's dilapidated infrastructure according to Morgan Stanley. Similarly, with
annual expenses. In 2015, China's can be a drag on economic development. mortgage volumes expected to rise, housing
urbanization rate reached 56%, and GDP finance companies could draw more
was $10.9 trillion, second only to the U.S. Investment Opportunity investment interest. Morgan Stanley
“At the time of economic expansion, Chinese estimates that India's 9% mortgage-to-GDP
cities offered a mix of good infrastructure, While India's property industry will represent ratio in 2016 could increase to around 17%
coupled with cheap land and labor. in 2026..
a significant opportunity if the growth
This attracted investment and led to
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