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India's Real Estate Sector Enters Hyper-Growth Cycle, Aiming for Viksit Bharat 2047

By GeoSquare News Desk · Published 2025-11-17

India's real estate sector has been a significant contributor to the nation's GDP, providing employment to 77 million people and contributing 7.8% to the economy. According to a combined report by Ernst & Young (EY) and the Confederation of Real Estate Developers Associations of India (CREDAI), the sector has seen exponential growth over the last 25 years. This growth is marked by a demand for over 6 million graded residential developments, 750 million square feet of Grade A commercial office and retail space, and more than 350 million square feet of warehousing space.

In the last decade, the real estate sector has been fueled by structured investments, regulatory reforms, urbanization, and rising income levels. New growth avenues such as co-working/living spaces, student/worker housing, and data centers have also emerged. Vishal Raheja, Managing Director of InvestoXpert, noted, “India is rapidly becoming a hotspot for global investors. With strong economic fundamentals, an expanding middle class, rising disposable incomes, and improved regulatory frameworks, the country offers unmatched opportunities across residential, commercial, retail, and alternative asset classes. The 2047 roadmap reaffirms that India is entering a golden era of real estate-driven wealth creation.”

The EY report also highlights the expected growth in the Indian economy, which is projected to hit USD 26 trillion by 2047-48. This economic growth is fueling optimism in the real estate sector. The sector is poised for further expansion with economic and demographic changes, and key building blocks include infrastructural development, policy initiatives, a focus on ESG and sustainability, and technological advancements.

There is a noticeable synergy between India’s infrastructure and the real estate sector, driven by initiatives such as the National Infrastructure Pipeline (NIP) and PM Gati Shakti. The NIP is a plan to identify and develop different infrastructure projects to drive economic growth, while PM Gati Shakti is a digital platform and master plan that aims to integrate these projects through synchronized, holistic, and comprehensive planning and execution. These policies are yielding results, as reflected in India’s leap in the World Bank’s ‘Doing Business Index,’ which has eased real estate regulations. Key areas such as construction permits, property registration, and contract enforcement are vital for the sector’s growth.

As India targets global urban standards, the role of technology becomes foundational. The smart city initiative is revolutionizing urban development, focusing on creating cities that are both high-tech and eco-friendly. Technology has significantly streamlined real estate development and service models. The emergence of artificial intelligence, machine learning, the Internet of Things (IoT), and Building Information Modelling (BIM) is reshaping real estate practices. PropTech, or property technology, is improving the efficiency of real estate dealings. The EY estimation of current market penetration for Information and Communication Technology (ICT)/PropTech-based solutions in the real estate sector is USD 10.5 billion, which is less than 5% of the overall real estate market size.

The report also raised concerns regarding institutional financing in the real estate sector. In recent times, private equity and structured finance have seen high penetration in funding corporate real estate. However, almost 80% of construction finance still comes from traditional sources, such as banks and Non-Banking Financial Companies (NBFCs). Region-specific initiatives have contributed significantly to India’s real estate growth. For example, Vapi, known for its chemical industries, is becoming a popular destination for businesses due to its strong industrial base, proximity to major employment hubs, and placement along the Mumbai–Ahmedabad corridor.

Virender Kumar, Vice President of Marketing at Arete Group, commented, “With its strong industrial base, proximity to major employment hubs like Daman and Silvassa, and placement along the Mumbai–Ahmedabad corridor, Vapi is becoming one of the fastest-growing real estate destinations in Western India. Vapi’s real estate landscape is undergoing a remarkable shift. Its robust industrial ecosystem, excellent interstate connectivity, affordable property prices, and rising workforce are creating strong rental and ownership demand. Cities like Vapi will be instrumental in India’s push toward balanced and inclusive urban growth.”

Tier II and III cities such as Indore, Surat, Coimbatore, Bhubaneshwar, Jaipur, Chandigarh, Salem, Bhopal, Visakhapatnam, and Agra are emerging as new real estate investment hubs, driven by infrastructure development, government reforms, and increasing demand. Akshay Taneja, CEO of TDI Infrastructure, highlighted the growth in the northern region, particularly in the Delhi–Meerut RRTS, the expansion of highways, elevated corridors, and the Kundli–Manesar–Palwal (KMP) Expressway. “Kundli’s growth perfectly mirrors the national real estate outlook. As connectivity, highways, and urban infrastructure mature around Delhi–NCR, micro-markets like Kundli are seeing unprecedented end-user and investor demand. This corridor is fast evolving as the natural northern extension of the capital region,” Taneja added.

The report suggested several steps the government should take to realize the vision of ‘Viksit Bharat 2047.’ These include the availability of land through effective zoning and land acquisition policies, investment-friendly models to support infrastructure development, and environment-friendly urban development practices. Additionally, the report emphasized the need for simplified government regulations, fast-track approval systems, and transparent policymaking to accelerate the real estate sector's growth.