India’s real estate market is rebounding with highest decadal sales in 2024 after decade-long slowdown

Riding on the post-pandemic boom, the country’s property developers and other industry stakeholders are now more optimistic than ever about a turnaround the likes of which has never been witnessed before. From premiumisation in the existing pockets to the addition of newer micro markets thanks to rapid urbanisation and infrastructure development, the country’s leading real estate players are placing their bets on the changing landscape of Indian cities.

Pradeep Aggarwal, Founder & Chairman of real estate company Signature Global (India) Ltd, says the Indian real estate sector surged in 2024, supported by rising urbanisation, shifting lifestyles, and increasing demand across premium and luxury segments. “Residential demand has been particularly strong, while the luxury market saw a boost from high net worth individuals and non-resident Indians (NRIs) keen on high-end amenities in cities like Gurugram, Mumbai, and Bengaluru,” he adds.

According to Aggarwal, the sector, valued at approximately $493 billion, contributes 7.3% of India’s gross domestic product (GDP) and is the second-largest job creator after agriculture. Thus, the fortunes of the sector will not only have a sustained impact on the lives of its stakeholders but will also prove to be crucial for India’s overall economic growth.

According to Anuj Puri, Chairman of real estate consultants Anarock Group, India’s housing market has seen a robust recovery after Covid, reaching its highest decadal sales level in the first half of 2024. “This trend is likely to carry on for the next one to one-and-a-half years due to economic growth, the enduring desire for home ownership, and urban development,” Puri tells Business Today.

Since this opportunity has arrived after years, developers are pulling out all stops to capitalise on it. Puri says builders are adapting to changing tastes by concentrating on high-end and luxury properties, which has led to an increase in new offerings in these segments. “Nevertheless, worries persist in the affordable housing sector as demand outweighs supply. In general, the market seems to be looking up, with prices holding and an uptick in luxury property projects.”

Realtors seem gung-ho about the growth prospects of the sector, and not without reason. Since touching the nadir in 2020 during the first wave of the pandemic, the housing market in India hit new highs in 2024. Data from real estate services firm JLL shows that during the first nine months of 2024, the Top 7 markets recorded the highest ever sales at 229,908 units, a growth of 17% year-on-year.

“Residential sales during the first nine months of 2024 achieved 85% of the volume recorded during the entire 2023, showing the robust sales traction across the Top 7 cities. As much as 23% of the overall nine-month sales were recorded in projects that got launched during January-December 2023,” says Samantak Das, Chief Economist and Head of Research and REIS, India at JLL. This indicates a strong revival of customer confidence in projects even in their early stages, he adds.

Manoj Gaur, Chairman and Managing Director of real estate company Gaurs Group, says there is also a shift towards bigger spaces and iconic projects by reputed developers, offering world-class amenities. The market consolidation that had started just ahead of the pandemic in 2018 has also picked up pace over the past few years, and that trend is only going to gain pace, leading to a further shift towards higher-quality projects in and around the urban centres, says Gaur, who is also Chairman of the industry association, Confederation of Real Estate Developers Associations of India (CREDAI) National.

The demand for wellness, technology, personalisation, and sustainability is here to stay, says Akash Ohri, Joint MD & Chief Business Officer, DLF Homes Developers. “The rise in demand for ultra-luxury homes shows no signs of slowing down, and as the market continues to evolve, we remain focussed on delivering not just homes but experiences that define the future of luxury real estate,” Ohri adds.

Gaur and Agarwal concur. The focus on sustainability and smart home features is only going to gain further traction, they say. Sustainability is a driving trend, with eco-friendly, energy-efficient properties gaining popularity.

Projections indicate that the sector could reach $1.3 trillion by 2034, says Agarwal of Signature Global. “By 2030, housing demand is anticipated to grow to around 70 million units, driven by urban infrastructure projects, favourable policies, and a resilient economy. As infrastructure projects accelerate and the economy expands, real estate’s contribution to GDP is poised to rise, solidifying its position as a key pillar in India’s journey towards sustained economic growth and urban modernisation,” he adds.

According to Puri, Indian real estate will continue to grow in the decade to come because of factors like rapid, need-based urbanisation, economic development, and demographic shifts. “We will certainly see a stronger emergence of co-living, a much more robust rental market, and a golden age for environmentally friendly buildings. We can certainly expect to see the sector become a bigger and stronger factor in boosting India’s overall GDP,” he says.

Another trend that could drive growth is that while Tier I cities will likely maintain their supremacy, Tier II and III cities will gain prominence as real estate hubs. “This trend should be well entrenched by the end of the next two decades,” Puri adds.

Additionally, the growth of co-working spaces and the integration of transformative technology like artificial intelligence (AI) in property management and blockchain for transparency will also redefine the industry, say experts.

Today a section of homebuyers are ready to move away from city centres in search of bigger homes and affordable luxury amenities, says Swaroop Anish, Executive Director and CEO of the residential segment and business development at realty major Prestige Estates Projects.

Apart from changing priorities, rapid infrastructure development in roadways and public transport systems like metros has also fuelled this trend, leading to large-scale residential projects now being launched by prominent developers on the outskirts of major cities like Bengaluru or Delhi.

Developers are hoping for a quick revival in the affordable housing segment to make the resurgence in their fortunes.

@arndutt