The 93 Million Quest: India’s Housing Demand Forecasted to Skyrocket
The nation of India has emerged as one of the world’s most powerful economies in 2023. Standing strong as the fifth largest economy globally, the country has been designated as the bright star in a world riddled with war, socio-political turbulence, and the catastrophic aftermath of the pandemic.
One of the most powerful propellants of the Indian economy, the real estate sector in the country is estimated to be worth US$1 trillion by 2030, up from US$200 billion in 2021. Rapid urbanisation, shifting consumer demand and patterns, progressive infrastructure development, etc. are all driving this growth. Indian residential real estate in particular has been growing strength to strength in the post-pandemic period, with the top 7 cities in the country being labelled as one of the most appreciating residential markets in the world.
According to industry research, the Indian residential real estate market is estimated at USD 227.26 billion in 2024 and is forecast to reach a whopping USD 687.27 billion by 2029. Not only that, the country is projected to witness a vigorous demand of 93 million homes by 2036. Further, the macroeconomic indicators, saturation of real estate in major cities, and demographic advantage show that a large chunk of this demand is going to be emulated in Tier 2 and Tier 3 cities.
The government’s infrastructure amelioration programmes, such as the Smart Cities Programme and the commercialization of Tier 2 and Tier 3 cities, are likely to further push the housing trajectory in these cities and become a driving force in the Indian residential market. In addition to this, with the Indian economy poised to become the third largest economy in the world, the emerging sections of the residential segment are slated for a rather positive outlook.
The study reveals that not only 2023 witnessed over 19,050 RERA registrations but also an unprecedented volume of interest from homebuyers, with 45% of the registered projects belonging to the residential sector. Among other interesting findings, the study also disclosed that while housing inventory in the country in 2024, standing at 10,42,195 units, is declining at 3% on a quarterly basis, it is also increasing by 2% on a yearly basis.
Further, while the Tier 2 cities witnessed a decline in demand after a long period of robust demand, the major metropolitan cities, such as MMR and Ahmedabad, experienced a significant reduction in inventory in Q3 2023. As far as pricing is concerned, there has been a 6% CAGR in apartment prices pan-India, reaching Rs 11,600 per square foot, with Delhi NCR leading the charge at a 22% CAGR.
Keeping all these parameters in mind, it is evident that the Indian real estate sector is currently at a critical juncture, poised to grow in an unprecedented manner. While 2023 has indeed been an excellent period of growth for the industry, 2024 is slated to accelerate the positive momentum, instilling homeowners and investors with a strong belief in real estate as a robust industry.
