India’s real estate sector needs to grow beyond its largest cities if it is to contribute significantly to the country’s economic growth, and to play a much more major role in India’s 2047 development goals, according to the ASSOCHAM-Knight Frank knowledge report, “Building Viksit Bharat: Real Estate as a Catalyst for Growth.” The report examines how real estate contributes to economic activity, employment, investment and urban development as India works towards its 2047 goals.
Real estate and ownership of dwellings have contributed nearly 7% of India’s annual Gross Value Added (GVA) over the last decade, while construction accounted for around 12% of total employment in 2025. The report suggests that the sector’s impact goes beyond property transactions, with real estate providing the physical base for households, businesses, manufacturing, logistics and newer areas such as digital infrastructure.
Real estate and construction remain key economic drivers
The sector’s role in the economy comes from its links with several other industries. Construction generates employment while residential and commercial development creates demand for materials, services, finance and infrastructure.
The report also points to real estate’s growing connection with organised logistics and digital infrastructure. As economic activity expands, demand for offices, industrial facilities, warehouses, housing and other physical assets is expected to increase.
This makes the sector relevant not only to the housing market but also to the broader expansion of economic centres across the country.
Emerging cities need a larger role in future growth
A key focus of the report is the need to look beyond India’s top eight real estate markets. Knight Frank India senior executive director Gulam Zia said the next phase of growth cannot be measured only by what is happening in the top eight cities and called for emerging cities and affordable housing to be brought into the mainstream of India’s real estate story.
This change could have a positive impact on the real estate development industry. As the development of infrastructure and economic growth occurs, these cities will attract investment and residential, commercial and industrial development. The approach also reduces the dependence of the sector on a limited number of established markets and creates scope for a wider distribution of investment and employment.
Affordable housing remains a challenge for the sector
Expanding real estate development across more cities will also require housing that caters to a wider range of incomes. The report places affordable housing alongside emerging cities as an important part of the sector’s future growth. The issue is highly significant given the affordable housing shortage in India, with demand for lower-cost homes continuing to outpace supply.
The need is particularly relevant as urbanisation increases demand for housing close to employment centres and transport infrastructure. Growing urban populations will require housing across income segments, making affordability an important part of the sector’s expansion.
Better integration between housing, employment and infrastructure will therefore be important as emerging cities develop.
Land reforms and institutional capital could unlock growth
The report also identifies land and regulatory reforms as areas that could help unlock further real estate development. Digital land records, land pooling, redevelopment and transit-oriented development can improve the way land is planned and used, while faster approvals and more standardised regulatory processes could reduce delays for projects.
Institutional capital is another part of the picture. The report points to REITs as a mechanism for monetising and recycling capital in real estate. India’s listed REITs held 167 million sq ft of office space across the eight major cities as of June 2026, while retail REITs and warehousing InvITs are also expanding the scope of institutional ownership.
For the real estate sector to contribute more significantly to India’s development by 2047, growth will therefore need to extend beyond established markets. Emerging cities, affordable housing, better land governance and access to institutional capital could determine how widely that growth is distributed.
