India's Real Estate Sector Enters Hyper-Growth Phase: Report
The real estate sector in India is on the brink of a significant growth cycle, contributing 7.8% to the GDP and providing employment to 77 million people. A report by Ernst & Young (EY) and CREDAI highlights the sector's exponential growth over the past 25 years.
Real EstateGdpEyCredaiViksit BharatReal EstateNov 17, 2025
In the last two and a half decades, the real estate sector has seen a remarkable increase in demand for more than 6 million graded residential developments, 750 million square feet of Grade A commercial office and retail spaces, and over 350 million square feet of warehousing space. This growth has been fueled by structured investments, regulatory reforms, urbanization, and rising income levels.
Vishal Raheja, Managing Director of InvestoXpert, shared an industrial perspective, stating, “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 noted that the Indian economy is expected to hit USD 26 trillion by 2047-48, driving optimism in the real estate sector. The sector is poised for further growth due to economic and demographic changes, with key building blocks including 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. These initiatives are accelerating the pace of innovation in real estate. 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.
India’s leap in the World Bank’s ‘Doing Business Index’ reflects the efforts to ease real estate regulations. Construction permits, property registration, and contract enforcement are vital for the real estate sector’s growth. As India targets global urban standards, the role of technology becomes foundational, not optional.
India’s smart city initiative is revolutionizing urban development, focusing on creating cities that are both high-tech and eco-friendly. Technology, including 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 (RE) 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, noting that private equity and structured finance have witnessed high penetration in funding of corporate real estate, while almost 80% of construction finance still comes from traditional sources like banks and Non-Banking Financial Companies (NBFCs).
Region-specific initiatives have also contributed to India’s real estate growth. For example, Vapi, known for its chemical industries, is becoming a popular destination for businesses. Virender Kumar, Vice President of Marketing at Arete Group, noted, “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 northern region's growth, stating, “The northern region is benefiting significantly from India's infrastructure-first development model. With the Delhi–Meerut RRTS, the expansion of highways, elevated corridors, and the Kundli–Manesar–Palwal (KMP) Expressway, peripheral NCR is transitioning into a high-value, high-demand real estate belt.”
The report suggested several steps for the government to realize the vision of ‘Viksit Bharat 2047,’ including the availability of land through effective zoning and land acquisition policies, investment-friendly models to support infrastructure development, and environment-friendly urban development practices. It also emphasized the need for simplified government regulations for fast-track approval systems and transparent policymaking.
Frequently Asked Questions
What is the current contribution of the real estate sector to India's GDP?
The real estate sector currently contributes 7.8% to India's GDP.
What are the key drivers of the real estate sector's growth in India?
The key drivers include structured investments, regulatory reforms, urbanization, and rising income levels.
What is the National Infrastructure Pipeline (NIP) and how does it impact real estate?
The National Infrastructure Pipeline (NIP) is a plan to identify and develop different infrastructure projects to drive economic growth. It accelerates the pace of innovation in real estate by improving connectivity and infrastructure.
What is the role of PropTech in the real estate sector?
PropTech, or property technology, refers to the intersection of the real estate industry with technology, software, and digital solutions. It aims to maximize the sale-purchase, research, marketing, and management of properties, improving the efficiency of real estate dealings.
Which cities are emerging as new real estate investment hubs in India?
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.
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