India's Real Estate Sector: A Key Driver of Economic Growth
The residential real estate market catalyzes infrastructural development in the vicinity, including roads, utilities, schools, and other amenities, thereby impacting the country's economy.
Indian Real EstateCredaiResidential Real EstateCommercial Real EstateEconomic GrowthReal Estate NewsAug 19, 2024
The sector's significant contribution to India's GDP has made it one of the primary drivers of the country's economic growth. A recent report by the Confederation of Real Estate Developers' Association (CREDAI) states that the real estate sector is expected to touch the market size of $1.3 trillion (13.8% of projected GDP) by FY 2034 and $5.17 trillion (17.5% of projected GDP) by 2047.
With the increasing real estate demands, the sector holds the potential to be the primary economic pillar of the country. Regions like Delhi-NCR have emerged as major contributors to this development, witnessing a 3% growth in housing sales and projecting as one of the biggest realty hubs in the country.
The residential real estate market catalyzes infrastructural development in the vicinity, including roads, utilities, schools, and other amenities, thereby impacting the country's economy. The Millennium City Gurgaon is a prime example of how improved infrastructure not only enhances the lifestyle but also supports economic activities in the surrounding areas.
The commercial real estate sector includes large-scale infrastructure development, including office buildings, malls, hotels, industrial parks, etc., which brings forth jobs in construction, architecture, property management, and many more. Cities with quality commercial real estate attract foreign and domestic businesses, further fostering business expansion and enhancing productivity.
As per the CREDAI report, 61% of the current supply is priced above Rs. 45 lakh among the residential segment. Over 87.4% of housing demand by 2030 is expected to be of homes priced more than Rs. 45 lakh.
Both the residential and commercial real estate contribute significantly to India's GDP growth by boosting economic activity, creating jobs, enabling wealth creation, and supporting infrastructure development and financial markets. India's urbanization rate has substantially increased and is expected to increase to 40% by 2030.
The rise in urbanization will lead to a surge in demand for housing, commercial and retail spaces, and improved infrastructure facilities. India's premium commercial and residential real estate landscape will entice global and local investors, encouraging business growth and increasing productivity.
As businesses expand and succeed, this will have a multiplier effect on the country's economy. The residential real estate sector significantly boosts India's economic growth and catalyzes the infrastructural development in the nearby areas.
Cities like Noida are experiencing growth in top-notch residential properties with modern amenities, making the city a preferred choice for investors and homebuyers. This further enhances the dwellers' lifestyle and supports the surrounding area's economic activities.
Frequently Asked Questions
What is the expected market size of the real estate sector by FY 2034?
$1.3 trillion (13.8% of projected GDP)
What is the expected housing demand by 2030?
7 crore
What percentage of the current supply is priced above Rs. 45 lakh among the residential segment?
61%
What is the expected urbanization rate in India by 2030?
40%
How does the residential real estate sector impact the country's economy?
It catalyzes infrastructural development in the nearby areas, including roads, utilities, schools, and other amenities, thereby impacting the country's economy.
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