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Why the Indian real estate market is anticipated to grow with a CAGR of 9% by 2028


Published on: June 27, 2023 | Updated on: June 27, 2023

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The Indian market in India is majorly driven by the increasing demand for residential buildings. In line with this, rapid urbanization and the inflating per capita income of the masses are significantly contributing to the market growth. The key reason for the rise is the increasing number of migrants from non-metro cities who are moving to metro cities for employment and educational opportunities. Additionally, the market is being stimulated by the rising demand for modern office spaces and the new lodging trend in urban and semi-urban areas. In addition, the Indian government has implemented policies like the Real Estate (Regulation and Development) Act and the Smart Cities Mission to assist the expansion of the real estate industry.

According to the latest report by the International Market Analysis Research and Consulting Group (IMARC Group), the real estate market in India is anticipated to grow at a rate of 9.2% (CAGR) by 2028. Real estate includes land and improvements, like structures, roads, buildings, and utility networks. It covers a range of real estate transaction stages, such as the commercial and residential sectors' building, selling, buying, leasing, and management procedures. It also includes undeveloped land, vacant property, apartments, condominiums, fourplexes, triplexes, townhouses, and accommodation for individuals and families. The overall demand for real estate is rising due to its many advantages, including tax savings, long-term security, diversification of assets, passive income, capital growth, and protection against inflation.

The IMARC survey provides a detailed analysis of the sector and includes information on the country's real estate market. In 2022, the size of the Indian real estate market was US$ 256.8 billion. Looking ahead, the market will develop at a compounded annual growth rate (CAGR) of 9.2% from 2023 to 2028, reaching US$ 780.6 billion.

The rise in demand for residential properties is driving the industry in India. This is due to the growing population and increasing demand for secondary income sources. In turn, this results in a promising market forecast. Additionally, significant investments in infrastructure, such as those made in motorways, airports, and metro systems, are helping the market expand, thereby creating new micro-markets.

Some of the Main elements promoting the expansion of the Indian real estate market are

1.    Rising urbanization: India is becoming an increasingly urbanized nation, boosting demand for real estate in urban areas. To enhance economic growth, the government is actively promoting urbanization.

2.    Increasing infrastructure investment: The Indian government is making significant investments in infrastructure, which is opening up new possibilities for real estate development. This includes building highways, railroads, airports, and other types of transportation infrastructure.

3.    Rising need for residential real estate: As India's population expands quickly, so does housing demand. Additionally growing in number is the middle class, which is increasingly interested in purchasing homes.

The Indian real estate market is well-positioned for further expansion in the next few years because of a young and increasing population, a fast-developing middle class, and a government that supports the industry. In addition to the mentioned elements, several additional trends are anticipated to have an impact on the Indian real estate market in the years to come. These consist of the expanding market for inexpensive homes, the rising demand for environmentally friendly and sustainable properties, co-living and co-working space growth, rising use of the internet for real estate platforms

Also, the demand for reasonably priced rental properties close to workplaces or educational institutions has greatly increased as a result. In addition, rising land, home, and flat prices, especially in Tier 1 cities, are anticipated to fuel market expansion through 2028. Furthermore, individuals who are wealthy and can afford homes or land may not have access to suitable investment options, leading them to prefer renting property, which stimulates the market's expansion.


The article is authored by Manju Yagnik Vice Chairperson, Nahar Group | Senior Vice President of NAREDCO- Maharashtra