The Indian real estate sector has long been a cornerstone of the country’s economic growth, but recent trends indicate it is entering a new phase of revival. Following a period of uncertainty marked by regulatory changes and market adjustments, the industry is now witnessing a surge in demand.
With India’s GDP projected to grow at 8% annually for the next 23 years, the real estate sector is set to reach US$4.8 trillion by 2047, accounting for 18% of GDP. This remarkable growth underscores the vital role of real estate in India’s economic future, solidifying it as an essential asset class for both investors and homebuyers.
With over 51% of India’s assets tied to real estate, understanding the drivers behind its revival becomes crucial as the industry continues to thrive.
Let’s take a look at 4 key factors driving its resurgence.
The real estate sector in India is witnessing a remarkable transformation, driven in part by the resurgence of mid-size developers who are gaining significant traction. These developers are carving out a strong niche by leveraging their agility, local expertise, and ability to respond quickly to market demands.
Take Shriram Properties, for example, which reported an impressive 47% quarter-on-quarter increase in sales for Q2 FY25, with 1.03 million square feet sold and a sales value of ₹568 crore. This strong performance highlights the growing demand for residential spaces, particularly in key metro markets.
Century Real Estate, based in Bengaluru, also posted exceptional growth, doubling its sales year-on-year with ₹1,040 crore in revenue in the first half of FY 2024-25. Their success is driven by a blend of prime location projects and keen market insights.
Meanwhile, Merlin Group, the largest real estate player in Kolkata, is executing projects worth ₹20,000 crore, aiming to double its annual revenue within the next 7-8 years, a testament to its strategic focus on large-scale, quality developments.
The real estate market is experiencing a surge in pre-sales, with large developers leading the way. Godrej Properties topped the list in the July-September quarter, recording pre-sales of ₹5,198 crore, solidifying its position as the largest listed player in the sector.
Similarly, Macrotech Developers, known for the Lodha brand, reported impressive sales bookings of ₹4,290 crore during the same period. These record pre-sales reflect strong market demand and investor confidence.
Tier II and III cities such as Indore, Surat, Jaipur, and Bhopal are emerging as key real estate investment hubs, fueled by infrastructure development, government reforms, and growing demand.
India’s Smart City Initiative is transforming urban landscapes by focusing on creating tech-savvy and eco-friendly cities. The rise of greenfield cities and new urban extensions is driving a surge in property demand, offering lucrative investment opportunities.
Future smart cities will prioritise efficiency, connectivity, and sustainability, reshaping the real estate sector.
As per CREDAI’s report, the Indian real estate sector, currently valued at US$300 billion, contributes 7% to the country’s GDP. With India’s GDP expected to grow at an average rate of 8% annually over the next 23 years, the real estate market is poised for significant expansion.
Experts predict the sector will maintain a steady 5-6% growth rate in the coming years, driven by rising demand and favourable market conditions.
As of December 12, 2024, the Nifty Realty Index has shown impressive returns over the past year and beyond, reflecting the strong growth in India’s real estate sector.
In the last 1 year, it has surged by 47.29%, demonstrating robust performance despite market fluctuations. The index has ranked second among all sectoral indices in terms of 1-year returns.
The sector’s strong performance, as reflected in the Nifty Realty Index and the increasing market confidence, emphasises its resilience. With the real estate market set to become an even more significant contributor to India’s GDP in the coming years, both investors and homebuyers have compelling reasons to stay optimistic about the future of the industry.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
We're Live on WhatsApp! Join our channel for market insights & updates
Get the link to download the App
