Real estate market in India – Expected Trends in the Future

India is growing by leaps and bounds in almost all sectors. And in the real estate market as well, there is good news!

Growth by leaps and bounds in Indian Real estate

The report suggests that the size of the real estate sector in India is anticipated to grow 12-fold becoming an industry with a value of USD$5.8 trillion by 2047. This year India will reach 100 years of independence.

Last year, the figure was USD$477 billion and will be contributing by over 15% to the country’s economic output as per a report by Naredco Knight Frank. The same was revealed in the report that Naredco, the realtors’ body and property consultant Knight Frank India compiled in “India Real Estate: Vision 2047”.

What experts say…

For the sake of study purposes, Knight Frank has assumed the mean estimated growth of the economy of India to a value of USD 36.4 trillion by 2047. When India attains its 100 years of independence, India’s economic size will range between USD33 trillion and USD40 trillion, as per estimates.

• Rajan Bandelkar who is NAREDCO India’s president believes that by 2047, there will be remarkable expansion in the Indian economy and the main driving force will be real estate. Since there will be an economic expansion in all sectors, a significant demand will be reflected in almost all quarters in real estate which will include industrial land development, warehousing, residential, and commercial. This positive change will be able to accommodate the growing needs of the individuals and that of the economy.

• According to the National Vice Chairman NAREDCO, Niranjan Hiranandani, growth in northbound real estate is mainly driven by factors that include the domestic economic ecosystem being favorable, domestic consumption power, economic resilience, plans related to infrastructure growth, and alternative investment models.

• Chairman and Managing Director of Knight Frank Shishir Baijal, the next 25 years will see dramatic growth and transformation in the real estate sector and the Indian economy.

Scenario of residential real estate

The report says that the size of the residential real estate market is expected to grow to USD3500 billion or USD3.5 trillion by 2047 from USD299 billion in the past year.

Scenario of commercial or office real estate market

This sector is likely to grow from YSD40 billion to USD473 billion. The warehousing market experts say is anticipated to reach USD34 billion from the previous USD2.9 billion.

Improvement of business investment sentiments, demographic advantages, and push in government policy towards high-value output sectors like infrastructure and manufacturing and other sectors. These factors will foster economic growth and expansion in the country.

Private equity or PE investment

Over the last two years, we have seen that private equity investments in the real estate sector in India have grown remarkably. Experts have cited a projection that it might reach USD 5.6 billion. It has reflected growth of 5.3% as year-on-year growth.

In a nutshell, since the gross domestic product is expected to attain USD36.4 trillion by 2047, the PE investment in the real estate market is projected to escalate by 54.3 billion by the same year. This signifies a Compound Annual Growth Rate or CAGR of 9.5% during the period 2023 to 2047, as revealed by the statement.

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