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Overview and Market of the Indian Real Estate Industry

January 02, 2025

The real estate sector of any nation contributes majorly to its economic growth and development. In India, the real estate industry is responsible for the second-highest employment ratio, after the agriculture sector. Apart from that, real estate is a stable yet lucrative investment asset forming a passive income source. In India, real estate is mainly categorized into four divisions: retail, housing, commercial, and hospitality. Indians, as well as NRIs (Non-Resident Indians), invest anticipatedly in the Indian real estate sector due to its lucrative returns. Let’s have a look at the standpoint of the real estate industry in India along with some key considerations such as the market size, government initiatives, and the role of technology.

Market Size of the Indian Real Estate Sector

According to the India Brand Equity Foundation (IBEF) , the real estate sector in India is expected to reach US$ 1 trillion in market size by 2030! Also, it is expected to contribute 13% to India’s GDP. Moreover, India is expected to deliver 46 million square feet in 2022. According to the Economic Times Housing Finance Summit, roughly 3 houses are built per 1,000 people per year compared with the required construction rate of five houses per 1,000 population. The pandemic slowed down the growth of the sector in 2020 and 2021. But 2022 seems to be the bounce-back year for India’s real estate industry. The sector has witnessed high growth in recent times with rising demand for office as well as residential spaces. The top three metro cities—Mumbai (~39%), NCR-Delhi (~19%), and Bengaluru (~19%) attracted ~77% of the total real estate investments recorded in the third quarter of 2021. According to Mordor Intelligence reports, more than 62,000 housing units were launched in 2021 compared to 41,000 housing units in 2020. So, we can definitely conclude on the note that India is paving its way for the real estate comeback in 2022!

Government Initiatives for Boosting Real Estate Sector

The Central, as well as state governments of India, have combinedly taken some key initiatives to boost the real estate sector in India. Some of the major initiatives include:

RBI kept the benchmark interest rate unchanged at 4% in October 2021. This led to a major uplift in the real estate sector in the country due to low-interest rates.
The Atmanirbhar Bharat 3.0 package in November 2020 included income tax relief measures for real estate developers and homebuyers.
Under Union Budget 2021-22, tax deductions up to Rs. 1.5 lakh on interest on housing loans have been extended until the end of fiscal 2021-22.

Technology Disruptions in Real Estate

The COVID-19 epidemic has propelled digitization throughout industries, including the real estate business. Due to the pandemic's constraints, which compelled purchasers to stay indoors, developers were obliged to turn to more inventive digital solutions to assure continuing demand. Practices such as augmented reality touring, online open homes, and virtual reservations have become more widespread. Blockchain-based smart contracts and unique virtual experiences for homebuyers have been already popular in some cities such as Banglore and Mumbai. The same wave of tech-based real estate growth is expected in tier-II cities of India as well.

On an Ending Note

The real estate sector of India in the past has been proven to be one of the most important assets of the country and is expected to grow over the upcoming years. The role of government and technology together can be highly beneficial for the overall development of the domain. MyProp is playing a part to grow the real estate sector in Vadodara and Gujarat. Get in touch with MyProp for the best land investment deals!