Indian Real Estate Industry Analysis

In India, the real estate sector is the second-highest employment generator, after the agriculture sector. The real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021. By 2025, it will contribute 13% to the country’s GDP. The 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. Rapid urbanisation in the country is pushing the growth of real estate.

The Indian real estate market is projected to experience a substantial increase, potentially reaching a value of US$ 5-7 trillion by the year 2047, with the possibility of surpassing US$ 10 trillion.

Construction is one of the largest sectors in terms of FDI inflow. FDI in the sector (including construction development & activities) stood at Rs. 3,94,340 crore (US$ 45.75 billion) from April 2000- March 2025

In the first quarter of CY25 (January–March), India’s residential real estate market experienced a notable slowdown, with total housing sales across the top seven cities declining by 28% year-on-year to approximately 93,280 units, down from over 1.30 lakh units in Q1 2024

In FY23, India’s residential property market witnessed with the value of home sales reaching an all-time high of Rs. 3.47 lakh crore (US$ 42 billion), marking a robust 48% YoY increase. The volume of sales also exhibited a strong growth trajectory, with a 36% rise to 379,095 units sold.

Housing sales across the top seven Indian cities saw a slight dip of 4% in 2024, with around 4.59 lakh units sold compared to 4.76 lakh in 2023, as per ANAROCK data.

Housing demand surged 77% from FY19 to FY25 with 5.44 lakh homes registered across major cities, showing strong buyer interest despite rising prices.

Indian real estate developers operating in the country’s major urban centres are poised to achieve a significant feat in 2023, with the completion of approximately 5,58,000 homes.

In 2023, luxury home sales in India priced at Rs. 4 crore (US$ 481,927) and above surged by 75%, doubling their share of total housing sales.

In FY24-25, India recorded Foreign Tourist Arrivals (FTAs) of 9.66 million (Provisional) which account for Foreign Exchange Earnings (FEEs) of Rs. 2,77,842 crores (US$ 32.23 Billion) with a growth of 19.8%.

India’s office sector had a record-breaking 2024, clocking 89 million sq. ft. of gross leasing across the top 8 cities — the highest ever. This marks a 19% jump over 2023, surpassing the previous peak by 14 million sq. ft.

For the first time, gross leasing in India's top 7 markets surpassed the 60 million sq ft mark, reaching an impressive total of 62.98 million sq ft, marking a substantial 26.4% increase compared to the previous year. Notably, the December quarter emerged as the busiest quarter on record, with gross leasing hitting 20.94 million sq ft.

Private equity investment in Indian real estate hit US$ 742million (Rs. 64 billion) in the first quarter of 2025, a strong 35% jump compared to the same period last year, according to Savills India.

Indian real estate attracted Rs. 35,300 crore (US$ 4.15 billion) in private equity (PE) investments in 2024, marking a 32% annual increase, according to Knight Frank India’s 'Trends in Private Equity Investment in India 2024' report.

The Indian real estate sector witnessed strong Private Equity investments in India’s real estate sector, stood at US$ 3 billion in the first half of 2024.

CBRE anticipated 14% increase in gross leasing transactions for office spaces across nine major cities in calendar year 2024, with a projected total of 70 million square feet. This growth is attributed to increased demand from both global and domestic corporate entities.

The Smart Cities Mission presents a major opportunity for real estate developers by targeting the development of 100 smart cities in India, stimulating the growth of commercial centers in their vicinity. Demand for industrial and logistics space hit a record in 2023, totaling 38.8 million square feet across 8 cities.

Foreign investments in the commercial real estate sector were at US$ 10.3 billion between 2017-2021. As of February 2022, Developers expected demand for office spaces in SEZs to shoot up after the replacement of the existing SEZs act.

Blackstone agreed to acquire a 40% stake in Kolte-Patil Developers for $134 million, involving both preferential shares and a secondary stake purchase.

Brookfield India REIT acquired a 50% stake in four Bharti properties, including Wordmark Aerocity. In return, Bharti got an 8.5% stake in the REIT, while Brookfield secured first rights to buy the rest after April 2026

Godrej Properties recorded all-time high sales of ₹29,444 crore in FY25, selling 15,302 homes up 31% in value and 29% in volume year-on-year.

Private market investor, Blackstone, which has significantly invested in the Indian real estate sector worth Rs. 3.8 lakh crore (US$ 50 billion) is seeking to invest an additional Rs. 1.7 lakh crore (US$ 22 billion) by 2030.

Global Real Estate Market Experts JLL’s 2024 Real Estate Transparency Index shows that India has moved into the transparent zone for the first time, ranking 31st out of 89 countries. 

According to Savills India, real estate demand for data centres is expected to increase by 15-18 million sq. ft. by 2025.

Foreign investors pump around US$ 3.1 billion yearly into Indian real estate, with a 37% YoY increase in foreign inflows in the first half of 2024.

Technology companies held the highest share in leasing activity at 22% during first quarter of 2024.Engineering and manufacturing (E&M) companies accounted for 13%, and banking, financial services and insurance account for 12%. Flexible space operators increase by 48%, showcasing their notable contributions.

In 2023, India's residential sector saw record sales and new property launches, overcoming concerns about monetary tightening's impact on housing loans. Major banks disbursed about Rs. 2.7 lakh crore (US$ 32.45 billion) in credit by January 2024, an annual increase of around 37%.

In the FY25, approximately Rs. 2.2 lakh crore (US$ 25.52 billion) was gathered from stamp duty, land revenue, and registration fees

HFCs reported a 12–14% year-on-year growth in assets under management (AUM) for both FY24 and FY25, indicating sustained demand in the housing loan segment.

In the FY23, approximately US$ 24.1 billion was gathered from stamp duty, land revenue, and registration fees

Home sales across top 8 cities in India surged 68% YoY to reach ~308,940 units in 2022, signifying a healthy recovery in the sector.

According to the Economic Times Housing Finance Summit, about 3 houses are built per 1,000 people per year compared with the required construction rate of 5 houses per 1,000 population. The current shortage of housing in urban areas was estimated to be ~10 million units. An additional 25 million units of affordable housing are required by 2030 to meet the growth in the country’s urban population.

The Government of India has been supportive towards the real estate sector. In August 2015, the Union Cabinet approved 100 Smart City Projects in India. The Government has also raised FDI (Foreign Direct Investment) limits for townships and settlements development projects to 100%. Real estate projects within Special Economic Zones (SEZ) are also permitted for 100% FDI. Construction is one of the largest sectors in terms of FDI inflow. FDI in the sector (including construction development & activities) stood at Rs. 3,83,229 crore (US$ 44.46 billion) from April 2000-September 2024.

In FY24 export from SEZs reached US$ 163.69 billion. Exports from SEZs reached US$ 157.2 billion in FY23 and grew ~28% from US$ 133 billion in FY22.In the first-half of 2021, India registered investments worth US$ 2.4 billion into real estate assets, a growth of 52% YoY.

Share of the top listed developers in the Indian residential market is expected to increase to 29% in FY24, from 25% in FY21, driven by a strong pipeline for residential project launch.

In the Union Budget 2024-25, under PM Awas Yojana Urban 2.0, housing needs for 1 crore urban poor and middle-class families will be met with a Rs. 10 lakh crore (US$ 120.16 billion) investment, including Rs. 2.2 lakh crore (US$ 26.44 billion) in central assistance over the next 5 years.