NAREDCO Chair Hiranandani Highlights 20 Lakh Skilled Worker Shortage in Real Estate and Infrastructure Sectors

Niranjan Hiranandani, chairman of the Hiranandani Group and National Real Estate Development Council (NAREDCO), highlighted the severe shortage of skilled workers in India’s real estate and infrastructure sectors. Currently, there is a deficit of approximately 20 lakh skilled laborers, a gap that is expected to widen to 50 lakh within the next five years due to rapid growth in these industries. Hiranandani emphasized the paradoxical situation where the country simultaneously faces unemployment and a shortage of skilled workers, posing a significant challenge for both private and government sectors to meet the rising demand.

Speaking at an industry event, Hiranandani flagged the declining sales in the affordable housing segment as a growing concern. For the first time in his 45-year career in real estate, he noted a 15 percent drop in affordable housing sales nationwide, not limited to major cities like Delhi and Mumbai. This decline is alarming given the critical role affordable housing plays in meeting the needs of India’s population. One of the primary reasons for this slump, he pointed out, is the soaring land prices around city centers, which make it difficult for developers to construct affordable homes close to employment hubs.

Hiranandani stressed that while schemes like PM Awas Yojana 2.0 aim to subsidize interest for constructing one crore homes in urban areas, the rising circle rates (land valuation rates) near city centers present a formidable obstacle. Coupled with increasing costs of construction, high tax rates, stamp duties, GST, and local authority fees, these factors collectively hinder the development of affordable housing in prime locations. Hiranandani called on the government and local authorities to intervene and create an enabling environment for affordable housing development, emphasizing that without such efforts, meeting urban housing demands will remain challenging.

On the broader real estate market, Hiranandani acknowledged a rapid premiumisation trend since 2020, where the share of housing priced below Rs 40 lakh has drastically reduced in key cities. Most new housing launches now target the luxury segment, priced above Rs 80 lakh and often exceeding Rs 1.5 crore. This shift reflects changing consumer demand but also underscores the affordability issues faced by many potential homebuyers.

Despite these challenges in affordable housing, the overall real estate sector remains robust. Hiranandani noted that the sector grew by 10 percent in the fiscal year 2024-25, and pan-India housing sales have not declined, contrary to some localized market trends. For example, data from property consultancy Anarock indicated that sales in India’s seven largest residential markets (Delhi-NCR, Mumbai, Bangalore, Pune, Hyderabad, Chennai, and Kolkata) dropped by 3.5 percent year-on-year in 2024 and by 24.3 percent in the first half of 2025. However, Hiranandani clarified that at the national level, housing demand and sales continue to grow steadily, projecting an annualized growth rate exceeding 15 percent for the ongoing fiscal year, potentially making it one of the highest growth periods for the sector.

Hiranandani also referenced similar labor shortages in related sectors, mentioning Larsen & Toubro’s (L&T) construction business, which is reportedly facing a shortage of 25,000 to 30,000 workers, further illustrating the widespread nature of skilled labor gaps across construction and infrastructure industries.

In summary, the real estate and infrastructure sectors in India face critical challenges: a rapidly expanding gap in skilled labor, a decline in affordable housing sales due to rising costs, and an ongoing premiumisation trend pushing housing prices higher. Addressing these issues requires urgent government and industry collaboration, especially to control land and construction costs and incentivize affordable housing development near employment centers. Despite these hurdles, the overall housing market remains resilient, supported by strong demand and steady growth projections. The future of India’s real estate depends on balancing growth with affordability and resolving labor shortages to sustain development.