Indian realty market expected to touch $1.5 trillion by 2034: Report

Bengalur: The Indian real estate market is expected to contribute a whopping $1.5 trillion accounting for 10.5 per cent of India’s gross domestic product in the decade-long period leading up to 2034, according to a new report released jointly by property consultancy Knight Frank India and the Confederation of Indian Industry on Friday. 

This growth, however, may not necessarily follow a linear upward trajectory given the cyclical nature of the sector. Nevertheless, Vivek Rathi, who heads research at the consultancy, said: “We note that a maturing supply side ecosystem that provides regulatory comfort to consumers and congruence among promise and delivery from the developers implying that the upward trend will continue for a relatively longer period as identified in our report for the next 10 years.” 

In 2023, the sector's market size was approximately $482 billion, contributing 7.3 per cent to the total economic output. 

This sector’s growth in the next 10 years will be led by the residential segment, which will see a requirement of approximately 7.8 crore fresh units on the back of a population surge to 1.55 billion, 42.5 per cent of which will be residing in urban centres. This holds the potential to generate an additional market value output of approximately $906 billion, per the report.

Meanwhile, the potential revenue generation from the office segment is estimated at $125 billion, with nearly 2,880 global capability centres leading demand by 2034. The report pegged overall office space demand to range anywhere between 2.7 - 4.4 billion square feet during the period. 

The warehousing market is projected to experience a potential demand of 111 million square feet by 2034, indicating the need of an additional 42 million square feet over the next decade. According to the report, the segment harbours the potential to generate revenue to the tune of $8.9 billion during the period under review.  

The report also highlighted that with India's GDP projected to reach $11.3 trillion by 2034, private equity inflows into the real estate sector are estimated to reach $14.9 billion, reflecting a compound annual growth rate of 17 per cent between 2023 - 2034.