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Indian Real Estate Industry Analysis

September, 2017

India’s real estate market is expected to reach US$ 180 billion by 2020 from US$ 93.8 billion in 2014. Emergence of nuclear families, rapid urbanisation and rising household income are likely to remain the key drivers for growth in all spheres of real estate, including residential, commercial and retail.

For the period January-September 2016, total private equity (PE) investments in the real estate sector were recorded at US$ 4.24 billion, showing a 22 per cent increase compared to the same period last year. During the third quarter of 2016, cumulative investment in residential assets increased at 9 per cent on a quarter-on-quarter basis.

The Government of India has been supportive to the real estate sector. In August 2015, the Union Cabinet approved 100 Smart City Projects in India. The Government has also raised FDI limits for townships and settlements development projects to 100 per cent. Real estate projects within the Special Economic Zone (SEZ) are also permitted 100 per cent FDI. In Union Budget 2015-16, the government allocated US$ 3.72 billion for housing and urban development. The government has also released draft guidelines for investments by Real Estate Investment Trusts (REITs) in non-residential segment.

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