Real estate market set to touch $5.8 trillion by 2047: Report

Bengaluru: As India advances towards the Viksit Bharat vision, the real estate sector is emerging as a critical driver of growth, productivity and job creation. The sector continues to be one of the largest contributors to employment generation, capital formation, and urban development, underpinning strong growth prospects and the potential to scale beyond $5.8 trillion by 2047. In 2025, the real estate market stood at $650 billion.

According to the 19th edition of the report titled ‘Reimagining India’s Real Estate Landscape’, released by FICCI-KPMG, the Indian real estate sector contributes 7.3% to the national GDP, underlining its important role in economic development.

Over $16 billion has been unlocked through REITs and InvITs, reflecting a market moving decisively from fragmented private ownership towards institutionally-managed transparent platforms. In the first quarter of 2026 alone, foreign firms leased a record 9.1 million sq ft of office space across India’s top-9 cities, driven by REIT expansion, rising GCC activity and greater use of flexible workplaces.

The report also highlighted the importance of AI in the real estate sector. AI adoption in India’s corporate real estate sector moved from under 5% in 2023, to 91% in 2025. That did not happen gradually. It happened inside two years.

“India’s real estate sector has earned its place as one of the most consequential growth stories in the world. Our task now is to build the digital discipline that sustains and scales that position,” said Raj Menda, Chairman, FICCI Committee on Urban Development and Real Estate.

According to the report, housing demand is projected to reach 93 million units by 2036, driven by a strategic shift towards higher value realisation, led primarily by growing buyer preference for high-end, luxury and ultra-luxury housing segments.

The industrial and warehousing sector witnessed strong activity in the first half of 2025, with overall leasing reaching 20 million sq ft. Demand was largely driven by third-party logistics (3PL) providers, followed by the engineering and automobile sectors, with continued support from e-commerce.

In 2025, retail leasing activity across major cities amounted to nearly 8.9 million sq ft, supported by demand from fashion and apparel brands, direct-to-consumer (D2C) players and food and beverage operators.