Vast swathes of land with construction activity and glittering buildings dotting the skyline greets you as you drive through the newly built urban highways and expressways in Indian cities! The massive transformation in the country’s physical, social and digital infrastructure is evident and its impact palpable. The Indian government has spent `54 lakh crore on capital expenditure in the last 11 years. This has had a huge multiplier effect on economic growth and consumption demand, benefitting sectors like real estate, manufacturing and services – the major job creators in the economy.
For India to become the third largest economy by 2030, the real estate sector will play a vital role. Rapid economic growth has led to a rise in urbanisation and affluence of Indians. Urban areas are projected to house 40% of the population by 2030, and per capita income of India is expected to surge by nearly 70% to reach $4,000 by 2030. These factors will create unprecedent demand for real estate.
The sector is projected to reach a market size of $1 trillion by 2030 from $300 billion currently with its contribution rising from 7% of GDP to 15%.
To achieve this, the sector must embark on an ambitious growth path. For that to happen, radical reforms must be undertaken in areas like taxation, approvals, ease of doing business, access and affordable credit, affordable housing to propel demand and attract domestic & foreign capital into the real estate sector.
India’s GDP at current prices is expected to reach $7.3 trillion by 2030 from $3.5 trillion in 2023-24, thereby overtaking Japan to become the third largest economy after the USA and China.
Paradigm shifts in real estate
India’s real estate has undergone a paradigm shift since the operationalisation of RERA in 2017. It has brought about vast improvement in compliance by real estate developers as a result of which the sector has seen huge transparency leading to a rise in investments by individuals, domestic and foreign institutional investors.
According to PropEquity data tracking RERA across 20 states, 1.43 lakh projects have been registered comprising 1.11 crore units between January 2017- January 2025.
Renewed Momentum post-pandemic
The sector has seen a cycle of growth never seen before in the past four years (2021,2022,2023,2024) after two years of slow growth which started in 2019 and dropped to its lowest during the COVID pandemic in 2020.
The pandemic ushered in strong homebuying sentiments from both domestic investors, who wanted to either upgrade to a new home or invest in this wealth-creating-income-generating asset class owing to rise in aspiration and affluence. NRIs too jumped onto the bandwagon and wanted a piece of real estate in their hometown back in India. To add to this, the massive infrastructure development like expressways and highways, airports, metro rail and rapid transit systems, modernisation of railways among others placed real estate sector amongst the best performing asset class.
These factors have played an important role in driving up housing sales and real estate price exponentially over the past five years.
According to PropEquity, the average housing price in India’s top 9 cities have gone up by 88% in the last five years with cities like Gurugram, Noida, Bengaluru, Hyderabad and Chennai recording growth between 80-160%.
During this period, the housing sales have gone up from Rs 2 lakh crore to Rs 6 lakh crore across top 9 cities with units sold rising from 2.7 lakh units to 4.7 lakh units.
The trend across India’s tier 2 cities is similar. In 2024, housing sales in India’s top 15 tier-2 cities saw a 4% increase in units sold to 1,78,771 units and a 20% rise in sales value, reaching ₹1.52 lakh crore.
Office leasing crossed 75 million sq. ft. in 2024 with strong demand from technology, BFSI and co-working operators. India’s warehousing sector leased 25.6 million square feet in 2024 while retail leasing touched 6.4 million sq. ft.
Conclusion
The need of the hour is to build on the momentum. Significant reforms on fiscal and monetary side must be undertaken to boost both demand and supply. The initiatives must not just incentivise developers by way of tax reliefs, policy tweaks and faster approvals but also homebuyers and investors to make it lucrative for them to invest in the real estate sector.
These measures will unlock the full potential of the Indian economy and help it become a $1 trillion market by 2030 contributing significantly to GDP and employment.
Samir Jasuja
Founder and CEO
