Indian real estate sector is set to achieve remarkable growth, with its market size projected to surpass $4.8 trillion by 2047. According to a joint report by CREDAI (The Confederation of Real Estate Developers’ Associations of India) and Ernst & Young, the sector will contribute over 18% to the country’s projected $26 trillion GDP in 2047.
Role of Technology in Real Estate
The report highlights the significant role of PropTech in transforming India’s real estate landscape. Currently accounting for less than 5% of the $300 billion industry, PropTech is expected to grow to $600 billion by 2047, making up 12-13% of the sector. Technologies like Artificial Intelligence (AI), Internet of Things (IoT), and Building Information Modelling (BIM) are improving efficiency, transparency, and operations across the real estate value chain.
Employing approximately 77 million people, or 14-15% of India’s workforce, the real estate sector is a vital part of the country’s economy. As the industry grows, it is poised to create even more job opportunities, solidifying its role as a key economic driver.
Infrastructure Development Fuels Growth
Macro-level infrastructure projects like the National Infrastructure Pipeline (NIP) and PM Gati Shakti are closely tied to real estate expansion. The NIP aims to invest $1.4 trillion over the next decade in transportation, energy, communication, and social infrastructure. These initiatives are unlocking new opportunities in nearby real estate markets, especially in Tier II and III cities like Indore, Surat, Jaipur, and Visakhapatnam.
India’s growing middle class and youthful population, projected to exceed one billion by 2047, will drive housing demand and real estate investments. Discretionary spending is also expected to rise, boosting the sector further.
Recommendations for Real Estate Reforms
The report outlines several recommendations to sustain this growth:
- Industry Status for Real Estate: Facilitating easier institutional financing and reducing borrowing costs for developers.
- Affordable Housing Thresholds: Increasing the sale value limit for affordable housing from ₹45 lakh to ₹90 lakh.
- Land Availability: Effective zoning and streamlined land acquisition policies to support sustainable urbanization.
- Planned Satellite Towns: Developing satellite towns near major cities to ease congestion and encourage balanced regional growth.
- GST Flexibility: Allowing developers to choose GST schemes for residential and commercial projects to access input tax credits.
India’s real estate sector is on track to play a crucial role in the nation’s economic future. With technological advancements, strong infrastructure projects, and supportive government policies, the industry is well-positioned to reach the $4.8 trillion mark by 2047, driving job creation, urbanization, and balanced regional development.
