Indian real estate market to grow to $10 trillion by 2047: report
According to a report by Colliers and the Confederation of Real Estate Developers’ Associations of India (CREDAI), the Indian real estate sector has received institutional investments worth over $60 billion in the past decade, much of which was funded by foreign parties.
The sector is expected to become a $10 trillion market by 2047, while its share in India’s gross domestic product (GDP) is expected to increase to 14-20 percent in the same timeline. Currently, the sector’s share in GDP stands at around 7.3 percent, the report said.
Foreign capital inflows are said to have increased in recent years due to strong domestic growth prospects, ease of doing business and continued easing of FDI.
The report further predicted greater adoption of alternative financing strategies in Indian real estate on the back of increased foreign capital and an equally strong contribution from domestic investors. “Green financing in the form of bonds and credit issuances, and relatively newer financing options such as social impact, distressed, special situations and venture capital funds, will become increasingly prevalent in the coming years,” the report said.
“Alternative segments such as senior housing, co-living and data centres will also see exponential growth, driven by changing consumer preferences and technology integration, with a focus on sustainability and energy efficiency becoming the norm in all developments,” said Boman Irani, President, CREDAI National.
The report found that the country’s average age is likely to rise from around 30 to around 40 by 2050. Meanwhile, around 50 percent of India’s population will live in urban centers by 2047.
Manoj Gaur, Chairman, CREDAI National, said, “With rapid urbanisation and supporting factors like infrastructure growth and employment opportunities, the real estate sector is likely to expand beyond tier I cities and create dispersed growth centres in smaller towns and villages.”
The report further reveals that initiatives such as the Real Estate Regulatory Authority (RERA) and regulations for real estate investment trusts (REITs) have increased transparency, boosted investor confidence and streamlined operations across the sector.
Asset classes under REITs/small and mid-market REITs are expected to expand from offices and retail to warehouses, hotels and rental income-yielding residential properties in the coming years. “In the long run, such financing options will become prevalent in alternative real estate verticals such as data centers, hospitals, educational institutions, senior and student housing, etc.,” it added.
First publication: Sep 23, 2024 | 6:22 PM IST