Indian Real Estate Set to Reach $1.5 Trillion by 2034, Driving 15% of Economic Output: Knight Frank India - CII Report

The Knight Frank-CII report forecasts substantial growth for the Indian real estate sector, projecting its value to USD 1.5 trillion by 2034. With urban expansion and infrastructure development driving momentum, the sector is poised to play a significant role in India's economic landscape, offering diverse opportunities for investment and development.

The latest report by Knight Frank India and the Confederation of Indian Industry (CII) presents an optimistic outlook for the Indian real estate sector, projecting a remarkable surge in value to USD 1.5 trillion by the year 2034. This comprehensive analysis delves into various facets of the sector, highlighting key drivers, sector-wise growth patterns, and the overall economic impact.

Key Insights from the Report:

1. Current Landscape and Growth Trajectory:

In 2023, the Indian real estate sector contributed 7.3% to the total economic output, with a market size of USD 482 billion. The report anticipates substantial growth, with the sector's value expected to triple by 2034, constituting 10.5% of the nation's economic output.

 2. Sector-wise Analysis:

 The residential market is poised to lead the growth trajectory, projected to reach a value of USD 906 billion by 2034. This will be complemented by significant contributions from the office sector (USD 125 billion) and land for manufacturing activities (USD 28 billion), driven by rising demand and infrastructure development.

3. Drivers of Growth:

Several factors are identified as catalysts for the sector's growth, including a burgeoning young population, bolstered domestic manufacturing, infrastructure development, and urban expansion. These favorable conditions are crucial for realizing India's economic potential and driving sustained growth in the real estate sector.

4. Outlook for Residential Real Estate:

 With India's population expected to reach 1.55 billion by 2034, urban centers will witness a surge in demand for housing. The report estimates a need for 78 million additional housing units in urban cities between 2024-2034, spanning across various segments, including affordable and luxury housing.

5. Commercial Real Estate Dynamics:

The commercial real estate sector is poised for significant expansion, driven by factors such as business expansion, infrastructure development, and the rise of the IT and services industry. Tier 2 and 3 cities are expected to emerge as key growth centers, attracting demand for office spaces and fueling sectoral growth.

The Knight Frank-CII report presents a compelling vision for the future of the Indian real estate sector, underpinned by robust growth projections and favorable market dynamics. As India's economy continues to evolve, the real estate sector is poised to play a pivotal role, offering lucrative opportunities for investment, development, and economic expansion. With strategic initiatives and conducive policies, stakeholders can harness the sector's potential to drive sustained growth and prosperity in the years to come.

Image source- timesproperty.com