Indian real estate market size estimated to jump over 12-fold to $5.8 trillion by 2047

The size of the Indian real estate sector is estimated to jump more than 12-fold to $5.8 trillion by 2047 from $477 billion last year and will contribute over 15 per cent to the total economic output of the country, according to Naredco-Knight Frank report.

Realtors' body Naredco and property consultant Knight Frank India on Friday released a report 'India Real Estate: Vision 2047'.

"India's real estate sector is expected to expand to $5.8 trillion or $5,833 billion by 2047. This estimated real estate output value will contribute 15.5 per cent to the total economic output in 2047 from an existing share of 7.3 per cent," Naredco-Knight Frank said in a statement.

By 2047, when India reaches 100 years of independence, the size of India's economy is estimated to range between $33 trillion and $40 trillion.

For study purposes, Knight Frank has taken the mean estimated growth of the Indian economy to a value of $36.4 trillion by 2047.

As per the report, the size of the residential real estate market is estimated to grow to $3.5 trillion ($3,500 billion) in 2047 from $299 billion last year.

The size of the office real estate market is likely to grow to USD 473 billion from USD 40 billion, while the warehousing market is expected to reach $34 billion from $2.9 billion.

"Significant expansion of the Indian economy by 2047, will be powered by real estate. A multifold economic expansion will boost demand across all the asset classes -- residential, commercial, warehousing, industrial land developments etc -- will grow at a multiplier rate to accommodate the growing needs of the economy and consumption needs of the individuals," Rajan Bandelkar, President NAREDCO India, said.

Niranjan Hiranandani, National Vice Chairman of Naredco, said the northbound growth in the Indian real estate sector is driven by the favourable domestic economic environment with economic resilience, bolstered infrastructure growth plans, alternative investment models, and domestic consumption power.

"The next 25 years are going to witness a dramatic transformation in the Indian economy and the real estate sector," Knight Frank India Chairman and Managing Director Shishir Baijal said.

Factors like demographic advantages, improving business and investment sentiments, and government policy push towards high-value output sectors such as manufacturing, infrastructure etc. will robustly support the economic expansion of India, he said.

Private equity (PE) investments in the Indian real estate sector have consistently grown over the past two decades.

"Projections for 2023 indicate that PE investments in Indian real estate are poised to reach $5.6 billion, reflecting a year-on-year growth of 5.3 per cent."

"With India's GDP expected to reach USD 36.4 trillion by 2047, the private equity investments within the Indian real estate sector are projected to surge to USD 54.3 billion by 2047, signifying a CAGR (Compound Annual Growth Rate) of 9.5 per cent spanning 2023 to 2047," the statement said.

Commenting on the report, Signature Global Chairman Pradeep Aggarwal said the real estate sector has demonstrated tremendous perseverance over the years and performed remarkably well particularly in recent times.

"The housing sector particularly has emerged stronger and healthier in the aftermath of Covid pandemic. Sales have been stronger, prices have inched up and there has been a substantial reduction in unsold inventory. The positives reflect the tremendous resilience of the sector, and is an indicator of a brighter future," Aggarwal said.