Indian Real Estate Market: A short statistical analysis

One of the biggest globally recognized economic sectors is real estate. With the world population rising so fast, real estate sector is continuously becoming a more important and exclusive sector of investment and business. Besides, the world has seen a corporate revolution over the years, which is also a huge factor behind the boom of real estate. Corporate office space and building demand is ever on the rise for urban and semi-urban accommodations. This increasing demand is pushing the boundary of real estate industry every day.

Real estate industry of India is growing at a fast speed; Image Source: content.magicbricks.com

While real estate is booming worldwide, India is no exception. Construction industry among 14 other major industries, has been ranked 3rd. The fast developing nation has a very large population which automatically makes it real estate heaven. The sector is especially growing for increasing participation of Non Resident Indian or NRIs. Government is encouraging private investment from the NRIs by different initiatives. Cities like Ahmedabad, Goa, Pune, Delhi etc. are going to most preferred construction investment places for the big real estate players in future.

Real estate market trend in India

  • Overwhelming demand: Real estate demand is overwhelmingly increasing in India as the income level of middleclass population has grown. This section is also opting for real estate investment or buying a home for them.
  • Opportunities: From education to healthcare, from e-commerce to logistics, real estate is opening new doors of opportunities in other sectors as well.
  • Future: With the current growth rate being maintained, Indian government is hoping for $1.3 trillion worth investment in real estate sector within the next 5 years.

Market size

Real estate sector is mainly divided into three main categories- retail, housing, hospitability and commercial. No wonder, all of the categories are growing by leaps and bounds with the biggest growth happening in housing. Currently, India’s real estate market’s estimated value is more than $140 billion. The sector is assumed to contribute 13 percent of the country’s GDP by 2025. Also, as the growth has been phenomenal over the years, Indian government is hoping to expand the market to $1 trillion by the year 2030.

Top trends in Indian real estate market; Image Source: ibef.org

A big advantage for India’s real estate sector is that the country’s IT industry is growing too fast. Sectors like IT, e-commerce, ITes, consulting etc. have sky-high demand for office space. By the end of the year 2018, commercial office stock surpassed the mark of $600 million. Experts are saying that office space leasing is also going to cross $100 million mark in each of the big cities by the end of 2020. Over a period of first 8 month of the year 2018, gross office absorption in India’s top 10 cities has increased 36 million square feet!

Gross investment statistics

  • With the real estate sector booming, private equity and venture capital investment sectors also have come a long way with this. The first 3 months of 2019 has seen investment of $1.47 billion so far from direct equity, venture capital and other stock market instruments.
  • $5.5 billion more was poured in this sector from institutional investments.
  • Since the beginning of 21st century, real estate sector of India has seen more than $25 billion FDI (Foreign Direct Investment), which is more than any other sector.
  • Total number of housing units in the top 7 cities of the country stood to 193,600 units which is a 32% rise from the previous year!

Government initiatives

As the real estate sector is proving to be a huge profitable industry for the country, the Indian government is leaving no stones unturned to take the industry further. Government has taken in hand, a lot of long-term as well as short-term plans and initiatives to further grow the ever growing sector of real estate.

For instance, the government has planned a project called Smart City Project. Under the project, government will be working on building 100 smart and enriched of modern technology cities across the country. This is going to open a huge door of opportunity for the existing construction companies of the country and will encourage newer companies as well.

Besides, initiation of Pradhan Mantri Awas Yojana and the creation of National Urban Housing Fund have both aided the rector and industrialization. Moreover, the flow of FDI in the very sector is humongous and Indian government has made this a 100 percent allocation for real estate letting the sector boom at its highest capacity.

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