Real Estate: The Backbone of India’s Economic Growth

Delivering a keynote address at the ET Realty Real Estate Conclave 2026, Niranjan Hiranandani, Chairman, NAREDCO, and Co-Founder & MD of Hiranandani Group, presented a confident yet calibrated outlook for India’s real estate sector.

Framing the industry within India’s broader economic trajectory, he highlighted sustained GDP expansion, infrastructure acceleration, and rising credit growth as foundational drivers for the next phase of development.

“Commercial lending is growing at nearly 15% annually,” Hiranandani noted, linking increased credit availability to both homebuyers and developers. With India expanding at over 7% and emerging as one of the fastest-growing major economies, he argued that real estate stands to benefit structurally. However, he cautioned that headline growth masks underlying imbalances. “In the last 24 months, affordable housing transactions have fallen by nearly 20%,” he said, describing it as a “very big number” that requires policy and market recalibration.

While mid-income, premium, and luxury segments have compensated for this dip, Hiranandani stressed that inclusive growth depends on reviving the affordable segment. He credited the PMAY (Pradhan Mantri Awas Yojana) scheme as a stabilizing factor, particularly through interest subsidies of 1.5–2%, but emphasized that broader ecosystem alignment is needed to sustain momentum in the lower ticket segment.

Infrastructure, he said, remains the strongest multiplier. Citing Mumbai’s transformation — with metro expansion, coastal roads, and the upcoming Navi Mumbai International Airport — he pointed to a structural rebalancing of peripheral growth corridors. At the same time, large-scale redevelopment and slum rehabilitation initiatives are reshaping urban supply. “You see cranes all over the city,” he observed, signaling multi-year construction activity across metros.

Hiranandani also highlighted evolving consumer behavior. Post-pandemic buyers are prioritizing experiential living, integrated townships, and mixed-use ecosystems combining residential, retail, hospitality, and social infrastructure. Sharing a recent example, he noted that a newly launched branded residential segment was fully sold within two days — underscoring appetite for differentiated products. “Today, buyers are willing to pay more for quality of life,” he said, adding that senior living, co-living, and branded residences are emerging as high-growth niches.

Yet, amid optimism, he flagged a structural risk: labor shortages. India currently faces a shortfall of nearly two million skilled construction workers, a gap projected to widen significantly by 2030. “Earlier the challenge was capital. Today, capital is available — skilled labor is the bigger challenge,” he said, urging faster skilling initiatives to support infrastructure and housing expansion.

Summing up, Hiranandani described real estate as a central pillar of India’s growth story. With infrastructure push, credit availability, and aspirational demand aligning, the sector is positioned for sustained expansion over the next three to five years. However, ensuring affordability balance and workforce readiness, he suggested, will determine whether the growth remains broad-based and sustainable.