India's real estate market likely to touch $10 trillion by 2047: Colliers-CREDAI Report

By 2047, an estimated 50% of India’s population will reside in urban centers, leading to increased demand across housing, office, and retail asset classes

Rapid urbanization, infrastructure development, digitalization, demographic shifts, sustainability and investment diversification will lead to expansion of the Indian real estate market from under a trillion currently to potentially a $10 trillion market by 2047 accounting for almost 14-20% share in the country’s GDP, a report by Colliers and Credai, released at the 22nd Credai-Natcon event in Sydney on September 23.

Indian real estate market is likely to touch $10 trillion by 2047, according to a Colliers-CREDAI report released at the Credai-NATCON 2024 event in Sydney, Australia

As many as 1100 real estate developers are attending the event.

The report titled Indian Real estate: The Quantum Leap noted that this will create multiple real estate hotspots along the way. Along the accelerated journey till 2047, the year the country celebrates its centenary year of independence, various real estate segments will evolve and continue to proliferate, growing and maturing by varying degrees.

Core assets such as office and residential real estate are likely to mature further and alternative assets such as data centers and senior living will embark upon strong growth trajectories. Market consolidation, fair-pricing and institutionalization will become more pervasive across asset classes, especially in the industrial and warehousing segment, it said.

Shifting demography and rising urbanization to spur long-term real estate demand

With shifting demographic patterns in India, the median age is likely to increase from around 30 years to around 40 years by 2050. Further, half of the Indian population is projected to live in urban agglomerations by 2050.

With rapid urbanization and supporting factors like infrastructure growth and employment opportunities, real estate traction is likely to expand beyond the tier I cities and create dispersed growth centers in smaller towns and cities. Peripheral areas of established cities and tier II and III cities of the country will particularly witness accelerated real estate development across asset classes, the report noted.

Shifting demographics will drive real estate activity, especially in housing and retail asset classes. With a significant portion of the Indian population likely to fall in the sweet spot of first-time homebuyers age-bracket, healthy traction across housing categories is expected in the next few decades. Additionally, a population with a significant share of older people can potentially speed up investments in the senior living market, it said.

“With the interplay of dynamic factors such as rapid urbanization, rising median age, and technological advancements, we are on the brink of a quantum leap, entering a new era of growth and diversification. By 2047, an estimated 50% of India’s population will reside in urban centers, creating unprecedented demand across residential, office, and retail spaces. Alternative segments like senior living, co-living, and data centers will also witness exponential growth, driven by evolving consumer preferences and technological integration with a focus on sustainability and energy efficiency becoming a standard across developments,” said Boman Irani, president, CREDAI National.

“As India navigates this exciting trajectory, the real estate sector will continue to attract institutional investments, fostering transparency, fair pricing, and global competitiveness. Being a leading industry body, CREDAI looks forward to working with various stakeholders to ensure that Indian real estate witnesses sustained and sustainable growth in the decades to come,” he said.

“India has set its sight on becoming a $10 trillion real estate market, driven by the sector’s ability to adapt and innovate. Landmark initiatives such as RERA and REIT regulations have enhanced transparency, improved investor confidence, and streamlined operations across the sector. These reforms, alongside critical programs like PMAY and Gati Shakti, are creating a conducive environment for sustained real estate development. The government’s focus on affordable housing, infrastructure modernization, and industrial corridors have transformed both urban and rural landscapes, driving growth beyond traditional hubs,” said Manoj Gaur, chairman, CREDAI National.

“As India commences on a period of expansion across most economic sectors, real estate is set for a ‘Quantum Leap’, with multiple growth opportunities arising along the accelerated journey phase. Favorable demographics and urbanization trends are likely to accentuate the emergence of over hundred - million plus cities by 2047. This in turn presents a case for emergence of multiple real estate hotspots dispersed across the country. Residential, office and retail segments, particularly, are expected to mature significantly in the next few decades, creating substantial opportunities for investors, developers and occupiers,” said Badal Yagnik, Chief Executive Officer, Colliers India.

Infrastructure augmentation and policy-level push have enabled the Indian real estate to sail through multiple ebbs and flows of property cycles. Through the last few decades, key regulatory frameworks and acts such as the RERA Act, PMAY, and REIT Regulations have provided a boost to investor and end-user participation.

Flagship programmes such as the Golden Quadrilateral Project, PM Gati Shakti Master Plan, ‘Make in India’ Programme and National Infrastructure Pipeline have positively impacted multiple real estate segments across the country, particularly the industrial and warehousing segment. With high-volume freight movement along industrial corridors, amplified requirements for warehouses, logistics hubs, and manufacturing units across multiple smaller locations in the country can be expected.

Over the next few years, asset classes under REITs/SM REITs will expand beyond office and retail to include warehouses, hotels, and rent-yielding residential properties. In the long-term, such financing avenues will become prevalent in alternate real estate verticals such as data centers, hospitals, educational institutes, senior and student living accommodations, the report noted.

Alternate investments to become mainstream

Institutional investments in the real estate sector in the last decade have crossed $60 billion, with the majority being funded by foreign players. The anticipated spurt in foreign capital and equally strong contribution from domestic investors will fast-track the adoption of alternate funding strategies in Indian real estate. Green financing in the form of bonds and credit issuances and relatively newer financing avenues such as social-impact, distressed, special situation, and venture capital funds will become more prevalent in the next few years.

Digitalization and sustainability to become central themes going forward

Over the next few years, the Indian real estate sector will increasingly embrace digitalization across aspects ranging from planning, design and construction to property and facilities management.

PropTech and Metaverse are likely to mature and elevate Indian real estate to global standards of operational efficiency, transparency and accountability. Increased data consumption, growing internet penetration, rise of online services, digitalization of businesses, and stricter adherence to data localization regulations are expected to spur demand for co-location and edge data centers closer to demand hubs, the report noted.