Real estate is an essential sector for any country's economic growth, and India is no exception. In the last few decades, the real estate industry in India has witnessed significant growth, and it is expected to continue on its upward trajectory in the coming years. In this blog post, we will discuss the growth of real estate in India, factors driving its expansion, and the current state of the industry.
The Growth of Real Estate in India
The real estate industry in India has witnessed significant growth in recent years. According to a report by the Confederation of Indian Industry (CII), the Indian real estate industry's contribution to the country's GDP is expected to increase to 13% by 2025 from its current 6-7%. Additionally, a report by Knight Frank predicts that the Indian real estate market is expected to grow by 9% annually and reach a valuation of $1 trillion by 2030.
The Indian government has also played a crucial role in driving the real estate sector's growth. The government has introduced several policies, such as the Real Estate Regulation and Development Act (RERA) and the Goods and Services Tax (GST), to regulate and streamline the sector. Furthermore, the government's initiatives such as the Smart Cities Mission, the Pradhan Mantri Awas Yojana (PMAY), and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) have been instrumental in boosting the real estate sector.
Factors Driving Real Estate Growth in India
Several factors are driving the growth of the real estate industry in India. One of the key factors is the country's growing population. According to the United Nations, India's population is expected to reach 1.5 billion by 2030, and this growth will create a massive demand for housing, infrastructure, and commercial real estate. The rise in disposable income and the growth of the middle-class population have also contributed to the demand for real estate in India.
Another significant factor driving the growth of the Indian real estate industry is urbanization. The percentage of India's population living in urban areas is expected to increase from 31% in 2018 to 40% by 2030. This growth will create a demand for more commercial and residential real estate in urban areas.
Current State of Real Estate in India
The Indian real estate industry has been impacted by the COVID-19 pandemic, and the sector's growth rate has slowed down. However, with the vaccination drive gaining momentum, the sector is expected to recover in the coming years.
The residential real estate sector in India has shown promising signs of growth, with an increase in demand for affordable housing. According to a report by Anarock Property Consultants, the affordable housing segment in India is expected to grow at a CAGR of 6% and reach a valuation of $1.7 trillion by 2025.
The commercial real estate sector in India has also shown promising growth, with the rise in demand for office spaces and the growth of the e-commerce sector. According to a report by JLL, the Indian office market is expected to grow at a CAGR of 10% over the next five years, and the e-commerce sector is expected to reach a valuation of $99 billion by 2024.
Conclusion
The real estate industry in India has witnessed significant growth in recent years, and it is expected to continue to grow in the coming years. The Indian government's initiatives, the rise in population, urbanization, and the growth of the middle-class population are the key factors driving the growth of the sector. Despite the challenges posed by the COVID-19 pandemic, the Indian real estate sector's future is promising, with growth expected in both residential and commercial segments.