India's Real Estate Sector Poised to Reach $4.8 Trillion by 2047: Report
A joint report by CREDAI and Ernst & Young predicts that the Indian real estate sector will grow to $4.8 trillion by 2047, contributing significantly to the country's projected $26 trillion GDP.
Real EstateProptechGdpInfrastructureAffordable HousingReal Estate MaharashtraNov 26, 2024
The report projects that PropTech, the technology-driven segment of the real estate industry, will grow to $600 billion by 2047, representing about 12-13% of the entire real estate sector. Currently, PropTech makes up less than 5% of the $300 billion real estate market.
This growth is being fueled by innovations such as Artificial Intelligence (AI), the Internet of Things (IoT), and Building Information Modelling (BIM). These technologies are revolutionizing operations, enhancing efficiency, and ensuring transparency across the real estate value chain, which will support India's ambitious economic goals.
The real estate sector currently employs over 77 million people, approximately 14-15% of India’s workforce, and is expected to continue growing in prominence over the next decade. The sector has long been a key economic pillar and is set to play an even more significant role in the country's development.
Several macro-level infrastructure initiatives are closely linked to this growth. The National Infrastructure Pipeline (NIP) and the PM Gati Shakti program aim to invest $1.4 trillion over the next decade in transport, energy, communication, and social infrastructure. These projects, including roads, railways, airports, and ports, are unlocking opportunities in adjacent real estate markets.
Tier II and III cities such as Indore, Surat, Jaipur, Chandigarh, Salem, Bhopal, Visakhapatnam, and Agra are emerging as new real estate investment hubs. These cities are expected to grow due to various factors, initiatives, and increasing demand. Additionally, India's young population and expanding middle class, projected to surpass one billion by 2047, will drive discretionary spending, housing demand, and real estate investments.
CREDAI has called for several incentives from the government to support this growth. These include granting industry status to the real estate sector to facilitate easier access to institutional financing and lower borrowing costs for developers. There is also a push to redefine affordable housing by increasing the threshold sale value to Rs 90 lakh from the current Rs 45 lakh.
Ensuring the availability of land through effective zoning and streamlined land acquisition policies is critical for sustainable urbanization. CREDAI advocates for the development of planned satellite towns near major urban agglomerations to decongest metros and foster balanced regional development.
Finally, the report suggests that developers should be offered the option to choose a GST scheme at the beginning of each project, both residential and commercial, to avail of input tax credit.
Frequently Asked Questions
What is the projected market size of India's real estate sector by 2047?
The Indian real estate sector is projected to reach a market size of $4.8 trillion by 2047.
What is the expected growth of PropTech in the Indian real estate sector?
PropTech is expected to grow to $600 billion by 2047, representing about 12-13% of the entire real estate sector.
What technologies are driving the growth of the real estate sector?
Artificial Intelligence (AI), the Internet of Things (IoT), and Building Information Modelling (BIM) are key technologies driving the growth of the real estate sector.
How is the government supporting the real estate sector's growth?
The government is supporting the real estate sector's growth through initiatives like the National Infrastructure Pipeline (NIP) and PM Gati Shakti, which aim to invest $1.4 trillion over the next decade in infrastructure.
What incentives is CREDAI seeking from the government?
CREDAI is seeking industry status for the real estate sector, redefinition of affordable housing thresholds, and options for developers to choose GST schemes for input tax credit.
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