Residential Real Estate - India

India

The Residential Real Estate market market in India is projected to reach a value of US$39.18tn by 2024.
This market is expected to exhibit an annual growth rate (CAGR 2024-2029) of 2.50%, resulting in a market volume of US$44.32tn by 2029.
When compared globally, it is worth noting that China will generate the highest value in the Real Estate sector, with US$112.9tn in 2024.
Residential real estate in India is experiencing a surge in demand due to the rising middle class and government initiatives promoting affordable housing.

Key regions: Europe, Brazil, France, Asia, United States

Market

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Analyst Opinion

The Residential Real Estate market in India has been experiencing significant growth and development in recent years.

Customer preferences: One of the key customer preferences in the Indian Residential Real Estate market is the desire for affordable housing. With a large population and a growing middle class, there is a high demand for housing that is within reach of the average Indian citizen. Additionally, customers also place importance on the location of the property, with proximity to key amenities such as schools, hospitals, and transportation hubs being a major factor in decision-making.

Trends in the market: One of the prominent trends in the Indian Residential Real Estate market is the rise of affordable housing projects. Developers are increasingly focusing on creating housing options that cater to the needs of the middle class, offering smaller-sized units at more affordable prices. This trend is driven by the government's push for affordable housing under schemes such as Pradhan Mantri Awas Yojana (PMAY), which aims to provide housing for all by 2022. Another trend in the market is the increasing popularity of gated communities and integrated townships. These developments offer a range of amenities such as parks, shopping centers, and recreational facilities, providing residents with a convenient and self-sufficient living environment. Gated communities also offer enhanced security, which is a major concern for many homebuyers in India.

Local special circumstances: One of the unique aspects of the Indian Residential Real Estate market is the presence of a large informal sector. Many transactions in the market are still conducted in cash, and there is a significant amount of unregulated construction happening in certain areas. This can pose challenges in terms of transparency and quality control, but the government has been taking steps to address these issues through initiatives such as the Real Estate (Regulation and Development) Act, 2016.

Underlying macroeconomic factors: Several macroeconomic factors have contributed to the development of the Residential Real Estate market in India. The country's strong economic growth, rising disposable incomes, and urbanization have all fueled demand for housing. Additionally, favorable government policies and incentives, such as tax benefits for homebuyers and relaxed foreign direct investment (FDI) norms, have attracted both domestic and international investors to the market. In conclusion, the Residential Real Estate market in India is experiencing growth and development driven by customer preferences for affordable housing and well-located properties. The rise of affordable housing projects and gated communities are notable trends in the market, while the presence of an informal sector and government initiatives to regulate the industry are local special circumstances. Underlying macroeconomic factors such as economic growth, rising incomes, and government policies have also played a significant role in shaping the market.

Methodology

Data coverage:

Figures are based on total and average value of residential real estate, residential estate transactions and leases.

Modeling approach:

Market size is determined by a combined top-down and bottom-up approach. We use national statistics, international organizations, and industry associations to analyze the markets. To estimate the market size for each country individually, we use relevant key market indicators and data from country specific industry associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the market, for instance, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

Data is modeled using current exchange rates. The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.