Indian Residential Property Market Soars to New Heights in FY23
India's residential property market has reached an all-time high in FY23, with home sales reaching Rs. 3.47 lakh crore ($42 billion), a 48% year-on-year increase and a 36% volume increase.
Indian Real Estate MarketResidential PropertyProperty MarketHousing DemandCommercial Real EstateReal EstateJul 29, 2024
The Indian real estate sector has witnessed a momentum growth in housing unit completions in India, touching 4.35 lakh units in 2023 from 2.5 lakh units in 2018, and is expected to reach 5.3 lakh housing units completion by 2024. The Central Government has launched a comprehensive Mission “Pradhan Mantri Awas Yojana (Urban) – Housing for All Mission”.
Factors driving the growth in the residential housing market in India are strengthening of the domestic economy, high urbanization, various government initiatives, and improved infrastructure. Homeowners are increasingly adopting greener residential projects and infrastructure to reduce carbon emissions and sustainability.
The Indian real estate sector has witnessed significant expansion over the decades. This sector has grown from a market size of $120 billion in 2017 to $477 billion in 2022 and the market size is estimated to be worth $1 trillion by 2030, largely led by the affordable housing scheme, according to real estate consultant Anarock and realtors' body NAREDCO.
CREDAI, the realtors body, predicts Indian real estate sector to significantly boost the economy, reaching $1.3 trillion by FY 2034 and $5.17 trillion by 2047. Indian real estate market size is approximately $300 billion, divided into residential and commercial segments at 80% and 20%.
The residential sector has experienced a strong revival in housing demand across the top-seven cities - Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, Kolkata, and Pune, owing to an increased realization of importance of home ownership, post-covid-19 pandemic.
India's 7 major cities witnessed an annual 8% growth in this sector, with the completion of housing units in 2023 at 4.35 lakh units, with improved cash flows of developers and better sales. In 2023, 4,35,045 units were completed, against 4.02 lakh units in the previous year.
Residential and commercial real estate sector is the second largest employment provider, after agriculture, generating jobs to over 50 million, 18% of the country's total workforce.
The Indian real estate employment grew to 7.1 crore in 2023 from 4 crore in 2013, driven by growth in the housing segment supported by several policy reforms by the government.
Importantly, there was a substantial drop in unsold housing inventory during 2021-2023 period with Delhi NCR leading with 19% decline followed by Chennai and Pune.
India's real estate sector is expected to reach an estimated $1.5 trillion by 2034 and is expected to contribute 10.5% to the country's GDP over the next 10 years. This marks a threefold increase from the sector's market size of approximately $482 billion in 2023, contributing 7.3% to the total economic output.
This growth is expected to be primarily driven by the residential market with an expected value of $906 billion, followed by the office sector contributing $125 billion. This is in the wake of India's rising urban population, which is estimated to reach 1.55 billion by 2034.
A surge in demand for new homes is expected in the urban areas in the country, which will rise to 78 million between 2024 and 2034 and this will span across various income brackets, from affordable to luxury housing segments.
Frequently Asked Questions
What is the current size of India's real estate market?
India's real estate market is approximately $300 billion, divided into residential and commercial segments at 80% and 20%.
What is the expected growth of India's real estate sector by 2034?
India's real estate sector is expected to reach an estimated $1.5 trillion by 2034 and is expected to contribute 10.5% to the country's GDP over the next 10 years.
What is driving the growth of India's residential housing market?
Factors driving the growth in the residential housing market in India are strengthening of the domestic economy, high urbanization, various government initiatives, and improved infrastructure.
How many jobs does the Indian real estate sector generate?
The Indian real estate sector is the second largest employment provider, after agriculture, generating jobs to over 50 million, 18% of the country's total workforce.
What is the expected demand for new homes in urban areas in India between 2024 and 2034?
A surge in demand for new homes is expected in the urban areas in the country, which will rise to 78 million between 2024 and 2034 and this will span across various income brackets, from affordable to luxury housing segments.
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