India's Real Estate Market to Surge 2X by 2047, Reaching $5.8 Trillion

New Delhi: India's real estate sector is poised for growth, with projections indicating that it will contribute 15.5% to the country's GDP by 2047, up from the current 7.3%, according to a report by CIRIL. The sector, which stood at $200 billion in 2021, is expected to touch $1 trillion by 2030 and soar to $5.8 trillion by 2047.

This expansion is being driven by multiple factors, including urbanization, infrastructure development, growing housing demand, increased commercial investments, and a shift toward sustainable and technology-driven real estate solutions. The government's focus on expanding urban centers beyond metro cities is also playing a crucial role in this transformation.

Strong Growth Across Real Estate Segments

In 2024, the real estate sector showed strong performance, with segments like residential, office spaces, logistics, retail, and hospitality witnessing steady demand. Between 2024 and 2028, these segments are expected to grow at a CAGR of 9.2%.

The commercial real estate market is expanding as businesses demand more office spaces and co-working hubs. Meanwhile, the rental market is gaining traction due to shifting work preferences and migration trends. The logistics sector, backed by the rapid rise of e-commerce, is also seeing heavy investments in warehousing and industrial real estate.

Tourism and hospitality are becoming key investment areas, with new hotel chains, luxury resorts, and serviced apartments on the rise. The retail sector is also witnessing strong momentum with the emergence of premium shopping malls, high-street retail outlets, and mixed-use developments.

Economic Growth and Infrastructure Development

India’s economy is expected to grow at 6.6% in 2025, driven by private consumption and investment, as per a United Nations report. This economic expansion is directly influencing real estate demand, particularly in Tier-2 and Tier-3 cities, where affordability and infrastructure growth are attracting both homebuyers and investors.

The government is also investing heavily in infrastructure, including highways, metro expansions, and smart city projects. These initiatives are boosting real estate prices and making cities more attractive for businesses and residents alike.

Investments and Market Trends

Despite global financial fluctuations, investment in Indian real estate remains strong. Domestic Institutional Investors (DIIs) are increasing their stake, reaching a record-high 16.46% market share in September 2024, with net inflows of ₹1.03 lakh crore. While Foreign Institutional Investors (FIIs) saw some outflows in October 2024, DIIs have continued to invest aggressively, ensuring market stability.

The trend of sustainable and tech-driven real estate is also gaining momentum, with green buildings, smart homes, and ESG (Environmental, Social, and Governance) investments becoming key drivers of future growth.

What Lies Ahead?

According to Vijay Sarathi, Chairman of CIRIL, real estate will remain a top investment avenue in 2025, with growth driven by co-living, co-working, warehousing, and retail projects.

With strong government backing, rising urbanization, and increasing investor confidence, India's real estate market is on a clear path to becoming one of the world's largest by 2047, unlocking new opportunities for businesses, homebuyers, and investors alike.