The Indian real estate market is poised to grow exponentially over the next 25 years, potentially reaching USD 10 trillion and accounting for 14-20% of the country's GDP. This growth will be driven by six key levers: urbanisation, infrastructure, digitalisation, demographics, sustainability, and investment diversification. Real estate will expand beyond major cities into tier 2/3 markets, with increased consolidation and institutionalisation. Alternate asset classes like data centres and senior living will see rapid development. Digitalisation through PropTech and the metaverse will improve transparency and efficiency. Sustainability will be a top priority, with green certifications becoming ubiquitous. Overall, India's real estate sector is set to be transformed into a USD10 trillion powerhouse.
The real estate sector in India is poised to play a pivotal role in the country's economic growth over the next few decades, according to a report by Colliers in collaboration with CREDAI. Over the next 25 years leading up to India's centenary of independence, the Indian real estate market is expected to grow from under USD 1 trillion currently to potentially USD 10 trillion, accounting for 14-20% of the country's GDP.
This remarkable growth will be driven by six key levers: rapid urbanisation, infrastructure development, digitalisation, demographic shifts, sustainability, and investment diversification. These factors will transform the Indian real estate landscape, creating new hotspots and driving expansion beyond the major tier 1 cities. Urbanisation will be a major driver, with half of India's population projected to live in urban areas by 2050. This will spur real estate development not just in the core tier 1 cities, but also in tier 2 and 3 cities as well as the peripheral areas of established metros. Demographic shifts will also play a key role. A large segment of the population will be in the "first-time homebuyer" age range, boosting demand for residential real estate. Additionally, the growing elderly population is expected to drive investment in senior living communities.
The real estate sector will also see increased institutionalisation and consolidation, especially in industrial and warehousing assets. REITs and smart REITs will expand beyond office and retail into asset classes like warehouses, hotels, and rental housing. Alternate investment strategies will become more mainstream, including green bonds, social impact funds, and venture capital for real estate. This will be facilitated by a surge in foreign and domestic capital flowing into the sector. Digitalisation will transform the industry, with PropTech and metaverse applications improving operational efficiency, transparency, and accountability. Increased data consumption and the need for data localisation will drive demand for co-location and edge data centres.
Advanced technologies will be crucial in making the real estate sector more environmentally sustainable. Developers will focus on incorporating eco-friendly elements throughout the construction process of buildings. In the office market, green building certifications are expected to become a standard requirement, and the adoption of green practices is likely to rise significantly from the current 60-70% range to nearly 100% over the next few years, according to the report.
The real estate sector in India is set to become a major contributor to the country's economic growth, with projections of expanding to USD 10 trillion by India's centenary of independence. Driven by urbanisation, demographic shifts, and technological advancements, the sector will see significant developments across tier 1, 2, and 3 cities. The increasing focus on sustainability and innovative investment strategies will further enhance its growth, positioning the Indian real estate market as a cornerstone of the nation's future economic landscape.
Advertisement
Facebook
Whatsapp
