In the last few years, India has emerged as one of the most attractive global destinations for real estate investment. With its robust economic growth, strategic government reforms, and the real estate market, both residential and commercial units, exhibiting a never-before-seen dynamism, the country offers unique advantages that are not only leading it towards a global hub but also suave international investors, including NRIs, who are betting heavily on its real estate market.
The thing that separates India from its other South Asian neighbours is the country’s resilient economy despite the prevalent global uncertainties. While many economies struggled with inflation, geopolitical tensions, and slowing growth, India had successfully offset challenges and continued to advance with strong economic indicators.
The nation’s GDP growth has consistently outpaced that of many developed and emerging markets, making it a safe and profitable destination for real estate investments. This robust economic foundation, coupled with a growing middle class and increasing urbanisation, has created fertile ground for sustained real estate development. As India’s population is expected to reach 1.55 billion by 2034, with 42.5% residing in urban centres, the demand for real estate is set to soar, benefiting both residential and commercial segments.
“India’s real estate market is experiencing rapid growth across various sectors, driven by changing consumer preferences and emerging economic opportunities. Among the most notable are co-working spaces, logistics, and residential real estate in Tier 2 and Tier 3 cities, further enhancing returns on real estate investment. Tier 2 cities like Vrindavan, Jaipur, Mohali, Lucknow, Chandigarh, and Dehradun are emerging as new frontiers for residential real estate, witnessing a 30% increase in housing sales,” said Yash Miglani, managing director of Migsun Group.
What has further aided this rise are factors such as economic growth, improved infrastructure, and increased connectivity. Besides, this demand has also been spurred by the growing affluence of its residents and a rising demand for global and integrated housing projects, he added.
Government policies have played a crucial role in shaping India’s real estate sector into a lucrative investment avenue. The Real Estate (Regulation and Development) Act (RERA) has introduced transparency and accountability, significantly boosting investor confidence. RERA ensures that real estate transactions are more secure, reducing the risks traditionally associated with the sector.
Initiatives like the Affordable Housing Scheme and the Smart Cities Mission have further enhanced the appeal of Indian real estate. The Smart Cities Mission, in particular, has propelled the development of urban infrastructure, making cities more livable and investment-friendly. These initiatives have not only attracted domestic investors but have also drawn significant interest from foreign institutional investors and Non-Resident Indians (NRIs). As a result, NRIs have invested approximately USD 13.1 billion in Indian real estate and are expected to contribute 20% to the country’s total real estate investments by 2025.
“When comparing India’s real estate market with other top investment destinations such as the United States, the United Kingdom, China, and Australia, several unique advantages set India apart. The expanding middle class is a significant driver of real estate demand. Unlike many developed markets where growth is slowing, India’s middle class is expected to continue growing, leading to sustained demand for both residential and commercial properties,” said Sachin Gawri, chief executive officer and founder, RISE Infraventures.
Additionally, India’s rapid urbanisation, with an estimated 50% of the population expected to live in urban areas by 2050, presents a massive opportunity for real estate development. This stands in contrast to many developed markets where urbanisation has already peaked, he added.
India’s real estate market is experiencing rapid growth across various sectors, driven by changing consumer preferences and emerging economic opportunities. Among the most notable are co-working spaces, logistics, and residential real estate in Tier 2 and Tier 3 cities. The demand for flexible workspaces has fueled the growth of co-working spaces across major Indian cities, catering to startups, freelancers, and large corporations seeking cost-effective office solutions.
The logistics sector, spurred by the e-commerce boom and the need for efficient supply chain management, has also seen substantial investments. This sector is expected to grow further as India continues to modernise its infrastructure and enhance connectivity.
Furthermore, India’s young population, with a median age of around 28 years, contrasts sharply with ageing populations in many other markets. This demographic advantage ensures a steady demand for housing, particularly in urban areas.
“India continues to be one of the most favoured real estate markets globally, climbing aggressively over the past decade. India has made notable progress compared to other BRIC nations, which are more or less of the same size. As an emerging economy, India has improved transparency, developed world-class infrastructure, and embraced the latest technologies at a cutthroat speed,” said Ankit Kansal, managing director, 360Realtors.
It is building new cities, urban corridors, logistic hubs, metro lines, airports, ports, business parks, and much more. It has an attractive demographic dividend, with 60% of the population aged below 35. This gives an organic push to the overall realty demand, further helping the sector to grow fast in the right direction, he added.
Looking ahead, the future of Indian real estate appears exceptionally promising. A recent report by Knight Frank India and CII projects a threefold growth in the real estate sector, with the market expected to reach USD 1.5 trillion by 2034. This growth will see the sector contribute 10.5% to India’s total economic output, up from 7.3% last year.
The residential segment is projected to reach USD 906 billion, while commercial real estate is expected to grow from USD 50.59 billion in 2023 to USD 241.82 billion by 2032, with a compound annual growth rate (CAGR) of 21.60%. The increasing demand for office spaces, particularly in Tier 2 and Tier 3 cities, will further drive this growth.
“Moreover, the demand for sustainable development is rising. What is also interesting to note is that even though many generations-old markets continue to hold their sway, there is a considerable demand for modern shopping experiences in these traditional shopping hearts. , particularly in these emerging cities. Such marketing arcades have emerged as a winning proposition in the commercial segment,” said Nandni Garg, director, Rajdarbar Ventures.
India stands out as a premier global destination for real estate investment in 2024. Its economic resilience, strategic government reforms, booming sectors, and favourable demographics position it as a uniquely attractive market. With promising future prospects and a growing appeal among both domestic and international investors, India is poised to play a pivotal role in the global real estate landscape in the years to come.
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