Indian Real Estate Industry Analysis

India’s real estate sector, the second-largest employment generator after agriculture, is poised for remarkable growth. Expected to reach US$ 1 trillion by 2030, up from US$ 200 billion in 2021, it is projected to contribute 13% to the country’s GDP by 2025. Long-term estimates suggest the market could hit US$ 5-7 trillion by 2047 and possibly surpass US$ 10 trillion. Rapid urbanisation, rising household incomes, and the emergence of nuclear families continue to fuel demand across residential, commercial, retail, and hospitality segments. India’s urban population is expected to reach 542.7 million by 2025, 675.5 million by 2035, and 900 million by 2047.

Housing demand surged 77% from FY19 to FY25, with tier I cities recording primary housing sales worth Rs. 6,70,000 crore (US$ 76.53 billion) in FY25, a 96% jump from FY22. Luxury housing also saw significant growth, with 7,000 homes priced Rs. 4-6 crore (US$ 466,091-699,137) sold in H1 2025, marking an 85% YoY increase. India’s HNI population, led by cities like Bengaluru, Delhi, Mumbai, Hyderabad, and Surat, crossed 850,000 in 2024 and is projected to nearly double to 1.65 million by 2027. Developers launched nearly 4.7 lakh residential plots worth Rs. 2.4 lakh crore from January 2022 to May 2025 across 10 Tier-I and Tier-II cities.

The office sector continues its rapid expansion. Gross leasing in top seven cities surpassed 62.98 million sq. ft. in FY25, a 26.4% YoY increase. Leasing for Global Capability Centres (GCCs) grew 24% YoY to 31.8 million sq. ft., representing 42% of total absorption. Gross Grade A leasing in Q2 CY25 reached 17.8 million sq. ft., driven by technology, BFSI, engineering, and manufacturing sectors. India emerged as the dominant force in APAC office leasing in H1 2025, accounting for 70% of total activity, with gross leasing projected to surpass 90 million sq. ft. in 2025. By Q3 2025, India is set to become the world’s fourth-largest office market, nearing 1 billion sq. ft. of total stock.

Retail real estate is evolving rapidly, with Millennials, Gen Z, and Gen Alpha driving demand for convenience, digital integration, and immersive experiences. Hospitality is projected to reach nearly US$ 60 billion by 2028, supported by rising domestic travel, government initiatives, and sustainable, experiential offerings. SEZs and Tier II cities like Kochi, Vadodara, Visakhapatnam, Gandhinagar, and Bhubaneswar continue to attract investments, with data centre demand expected to rise by 15-18 million sq. ft. by 2025.

Private equity inflows rose 38% YoY to Rs. 20,566 crore (US$ 2.4 billion) in H1 2025, with Q2 alone contributing Rs. 13,710 crore (US$ 1.6 billion). As of Q3 2025, India’s real estate sector recorded a record 42 transactions worth Rs. 25,375 crore (US$ 2.9 billion), marking the highest quarterly deal value to date and driven by strong institutional investment across mergers and acquisitions, private equity, REITs and public market activity. Blackstone, with Rs. 3.8 lakh crore (US$ 50 billion) invested, plans an additional Rs. 1.7 lakh crore (US$ 22 billion) by 2030, while Brookfield India REIT acquired a 50% stake in four Bharti properties.

The Indian government aims for 100% digitisation of land records by December 2025, reducing risks related to ownership disputes. New real estate laws mandate centralized digital property registration, RERA compliance, and real-time project updates, boosting investor confidence. FDI in construction activities from April 2000-June 2025 reached Rs. 323,987 crore (US$ 36.85 billion), while construction development attracted Rs. 2,39,261 crore (US$ 27.21 billion). Housing Finance Companies reported 12-14% YoY growth in AUM in FY24 and FY25, reflecting strong housing loan demand.

Tourism-driven real estate also supports growth, with FY25 foreign tourist arrivals reaching 9.66 million and generating Rs. 2,77,842 crore (US$ 32.23 billion), a 19.8% increase. Top source countries were the USA (16.3%), UK (13.5%), Australia (6.1%), Canada (4.8%), and Bangladesh (4.6%). Under PM Awas Yojana Urban 2.0 (Union Budget 2024-25), housing for 1 crore urban poor and middle-class families is supported by Rs. 10 lakh crore (US$ 120.16 billion), including Rs. 2.2 lakh crore (US$ 26.44 billion) in central assistance over five years. Despite progress, India requires an additional 25 million affordable housing units by 2030 to meet urban population growth.

As of November 2025, India’s Real Estate Investment Trust (REIT) sector surpassed a Rs. 1,00,000 crore (US$ 11.43 billion) market capitalisation milestone and is projected to expand up to an estimated Rs. 10,80,000 crore (US$ 123 billion) opportunity by 2029 driven by institutional demand in office and retail assets.

As of August 7, 2025, India’s office market remained on track to surpass a record 90 million square feet of gross leasing activity in 2025, driven by strong demand from Global Capability Centres, technology, BFSI and engineering sectors across the top eight cities, reflecting sustained occupier confidence and robust market momentum.

India’s real estate sector stands at the cusp of a transformative era, driven by rapid urbanisation, digital reforms, and strong investor participation. With growing demand across residential, commercial, retail, and hospitality spaces, the sector is set to remain a key pillar of India’s economic expansion. As modern infrastructure, policy support, and sustainable development converge, India’s real estate market is well-positioned to emerge as a global powerhouse shaping vibrant cities and enabling inclusive growth in the decades ahead.