By: Pranay Vakil, Chairman, Praron Consultancy
Track2Realty Exclusive: The real estate all over the world is facing a crucial situation and observing a radical shift in population trends. Most of the people believe funding of the developers’ projects or the land occupancy cost is the real concern of the sector. However, as per my research and knowledge the broader issue lies in the conceptualization of urbanization.
A wave of urbanization boosting the growth across emerging economies over the world continues to have pockets of acute fragility. Urbanization is a problem which has assumed gigantic dimensions in some of the advanced countries of the world.
It means the concentration of population is at rise in the economically developed and industrialized centres and other big cities of the world. This leads to much congestion and many social and economic problems.
As per McKinsey report on every year, the world’s urban population expands by 65 million people—the equivalent of seven cities the size of Chicago. These growing urban economies are creating waves of new consumers and reshaping global markets in very different ways.
To capture this significant opportunity, companies need to understand which cities today could be their most promising new markets tomorrow.
Modern urbanized life has produced a new environment, creating new problems of adaptation. Modern cities have grown in a haphazard and unplanned manner due to fast industrialization.
Cities in developing countries become over-populated and over-crowded partly as a result of the increase in population over the decades and partly as a result of migration from the countryside to the big industrialized cities in search of employment, or in search of a higher standard of living and better living conditions.
Skilled workers and dynamic businesses are always attracted towards the economic magnetism of the cities, benefiting economies of scale. Urbanization and per capita GDP tend to move in close sync as countries develop. But what is different about today’s wave of mass urbanization is its unparalleled speed and scale.
The move to urban living is shifting the incomes of millions of people around the world. This sweeping shift will hit the demands of essential products and services, increasing the level of consumption steeply. This indicates high injection of spending by urban consumers in the world economy by 2025, which will boost the economies along with the challenges too.
…..to be continued
