India's realty mkt to grow at 18.7% to touch $1trn by 2030

Hyderabad: In recent years, India's real estate sector has demonstrated remarkable resilience, poised for a compounded annual growth rate (CAGR) of 18.7 per cent from 2020 to 2030. The trajectory, moving from $180 billion in 2020 to a projected market size of $1 trillion by 2030, is fueled by government initiatives, technological integration, sustainability measures and increased investments.

One of the most significant trends shaping India's real estate landscape is the increasing focus on sustainability and technology. Sustainability is influencing green construction practices and energy-efficient designs, while technology is revolutionising aspects such as smart homes and data-driven insights. These trends are enabling developers to create more efficient and cost-effective building designs, while also providing buyers with a more immersive and interactive experience.

India's real estate sector is experiencing a significant upswing, driven by strong demand in both the residential and commercial segments. The implementation of affordable housing schemes and investor-friendly policies has fueled growth in the housing market, while the emergence of flexible workspaces reflects the evolving requirements of modern businesses.

However, the sector does face certain challenges, including the need to attract and retain investors, secure adequate funding, develop robust infrastructure and address the skill gap. Overcoming these challenges is crucial to sustaining the sector's momentum, necessitating substantial investments, innovative financing solutions, improved infrastructure and a skilled workforce.

Delving deeper into this sector, KPMG in India in association with NAREDCO released a thought leadership report titled ‘Navigating the dynamics of real estate in India – Smart, sustainable and connected at NAREDCO’s 16th National Convention.

The influx of innumerable players into India's real estate market through joint ventures and direct investment is bringing in capital, expertise and technology. According to the High-Powered Expert Committee (HPEC), investment in urban infrastructure is projected to increase from 0.7 per cent of GDP in 2011-12 to 1.1 per cent by 2031-32.

The sector has witnessed significant private equity (PE) investments in recent years, driven by attractive returns. Investments are expected to reach USD59.7 billion by 2047. The sector's investment potential is promising due to increased government support, sustainability and the integration of advanced technologies. Changing business dynamics are also creating new opportunities in the sector, which may attract further investments.

India's real estate sector is witnessing the rise of tier II and III cities, such as Surat, Bhubaneshwar, Coimbatore, Vadodara, Indore, Chandigarh, Kochi and Visakhapatnam, as significant contributors. These cities have demonstrated remarkable economic growth, improved connectivity and enhancement in infrastructure.

Renowned for their attractive investment prospects, tier II and III cities are attracting attention due to their abundant talent pool and affordability, making them appealing to both startups and established corporations, as well as industrial entities.

In the dynamic landscape of India’s real estate sector, the transformative impact of technology is reshaping traditional paradigms. It becomes imperative to dissect the multifaceted ways in which technological advancements are not only augmenting but also redefining the sector.

The Indian real estate sector has witnessed a surge in proptech startups, focusing on innovative solutions, such as AI-driven analytics, blockchain-based transaction platforms and others. Increasing interest from venture capital firms in proptech startups also indicates growing confidence in the potential of technology integration in the sector. Cities such as Bengaluru and Hyderabad have become hubs for proptech innovation, hosting a burgeoning community of startups and technology firms that are revolutionising the real estate landscape.

India's real estate sector is witnessing a significant shift towards sustainability, with a remarkable 82 per cent of new Grade A office supply as of September 2023 being green certified. The industry is increasingly adopting renewable energy sources, particularly solar power, in alignment with India's ambitious goals for a cleaner and more sustainable energy mix.