The Future of Real Estate in India: Trends and Impact

With the number of people on the planet growing infinitely, the need to keep up with physical demands, such as proper housing, transportation, and quality of work and life, has led to the dynamic shift and growth we see in our industries, followed by infrastructural development and government initiatives that boost the economy as a whole. It is this cycle that has led to the real estate growth rate in India, and the sector sure has witnessed an epic journey, evolving from a growing sector to becoming a significant contributor to the national economy. This blog explores the key trends shaping the future of real estate in India, its market dynamics, the real estate forecast for the next 5 years, and the growing significance of Vastu in property development and buyer decisions, offering insights into the real estate potential by 2030.  

Latest Trends in Real Estate

Urbanisation 

• India’s rapid urbanisation has led to huge real estate demand, particularly in tier-I and tier-II cities. As more people are migrating to urban areas in search of better employment opportunities and lifestyle options, they are on the lookout for good housing, commercial spaces, and infrastructure alternatives.
• By 2030, 60% of new home buyers are predicted to be millennials and Gen Z, according to a JLL report. The housing sector is expected to contribute 13% to the national GDP by 2025.
  

• There is a subsequent interest emerging in sub-segments such as data centres, healthcare, hospitality, co-living, and co-working spaces, which are expected to drive future investments as posed in the real estate forecast for the next 5 years.

Technological Integrations

• Technology is changing the real estate growth rate in India and the way it performs, from property searches and online transactions to smart home technologies and construction techniques. PropTech companies are on the rise, offering innovative solutions for property management, financing, and customer engagement.

Sustainability

• Sustainability today is a key cause in property development and optimisation. Green buildings, renewable energy sources, and sustainable construction practices are slowly becoming the norm. Builders are integrating energy-efficient designs, water conservation systems, and renewable energy solutions to cater to conscious buyers, reflecting a growing emphasis on environmental responsibility.
• Green-certified buildings are expected to account for 30% of new residential projects by 2025, doubling from 15% in 2020.

Changing Consumer Preferences

• Buyers are increasingly looking for properties that align with their lifestyles and preferences. Preferences change according to age groups, income groups, and lifestyle decisions, ranging between spacious homes, access to amenities, and proximity to workplaces and social activities. 

Government Initiatives

• Government policies, including the Real Estate Regulation and Development Act (RERA) and the Smart Cities Mission, are creating a more transparent and accountable medium that is beneficial for long-term growth with various initiatives, including infrastructure development, affordable housing schemes, and regulatory reforms. 

Investment in Tier II and III Cities

• Real estate forecast in India shows how these cities are being considered smart investment opportunities due to their affordable settings and talent availability, driving demand for both residential and commercial properties
• Tier II and III cities are becoming pivotal growth hubs, with smaller urban centres like Jaipur, Indore, and Kochi driving more than 40% of new housing developments by 2025.

Real Estate Market Overview in India

The market is valued at approximately $200 billion, and the real estate growth rate in India is projected to reach $1 trillion by 2030. It is characterised by several segments, including residential, commercial, retail, and industrial. 

• The residential segment remains the largest, driven by a strong demand for affordable housing, rising income levels and nuclear family setups.
• The commercial real estate market is waiting on significant growth fuelled by the rise of co-working spaces, owing to economic growth and FDI inflows
• A niche but growing segment is luxury housing, which is powered by the rise in HNIs (High-Net-Worth Individuals) and NRIs (Non-Resident Indians).  

Key Factors Driving The Future Of Real Estate In India

Real estate, although involves the construction of properties, is not just about brick and mortar. A complex interplay of forces fuels its growth, from economic shifts and demographic trends to technological innovations. Let’s look at some of the factors that affect this sector.

• Economic growth – India’s urban population is expected to reach 600 million by 2031, and increasing migration to cities is driving a higher demand for real estate. Paired with having more disposable incomes, the intention of forming nuclear families, complemented by a growing workforce, has created a huge demand for both residential and commercial properties.
• Infrastructure –  The Govt. has brought in multiple programs like Smart Cities Mission, AMRUT, tax incentives for affordable housing, and expansion of metro networks and expressways to facilitate urban planning and connectivity, making peripheral areas attractive for investment.  
• Rising foreign investments – Citizens are given more access to credit and financing options to purchase properties. Relaxed FDI norms have brought in capital and expertise from around the world for the development of high-quality projects. 
• Digital inclusion – The adoption of fintech solutions has streamlined property transactions, making them more transparent, accessible, and secure, thereby increasing trust among buyers and investors.  
• Luxury lifestyle projects – As the number of people with disposable incomes keeps increasing, there is a new sub-segment that is particularly catching attention. Luxury properties with premium amenities and integrated townships offering residential, commercial, and recreational facilities have gained popularity for their convenience and all-rounded living experiences.

Vastu in Real Estate

Vastu Shastra is an ancient Indian science of architecture and design. It takes into account the subtle changes in the energy flow and creates living spaces that are in accordance with nature. Read more about Vastu Shastra and its principles in architecture.

In India, cultural beliefs and traditions significantly influence buying decisions, and Vastu is gaining prominence in the Indian real estate market as one such influencing element. The common belief that Vastu-compliant homes bring prosperity, health, and happiness is driving demand, especially in the residential sector, and many developers are incorporating Vastu principles into their projects to attract buyers who value these traditional concepts. 

Future Projections and Inclination Towards Vastu Homes

The future of real estate in India is intertwined with the cultural fabric of the country. The adoption of technology, the growing emphasis on sustainability, and the evolving preferences of buyers will shape the future of the sector. While modernity is the fraternity today, there are elements rooted in age-old wisdom that home buyers wish to incorporate into their homes, and hence the inclination towards Vastu homes is very likely to increase in the coming years. As awareness of Vastu principles grows, more buyers will seek properties that align with these traditional concepts, and developers are likely to capitalise on this trend by incorporating Vastu principles into their projects to attract a wider range of buyers.

Real Estate Predictions for 2030

Market valuation – The real estate sector is projected to reach a size of $1 trillion by 2030 and contribute over 13% to India’s GDP, regulated by residential and commercial investments.  

Tier-II and Tier-III Growth – Cities such as Indore and Kochi will account for 60% of real estate transactions, resulting from the support of government initiatives and better connectivity.  

Sustainability – Green building certifications are poised to become the norm with the increased adoption of eco-friendly materials and renewable energy. India ranked third globally for the number of LEED-certified green buildings in 2022, and the trend towards sustainability is expected to continue.

Technology – From property search and transactions to construction and management, technology stands at the forefront of innovation in any field. Blockchain, AI, and IoT will dominate real estate operations for efficient property management, and technology will give way to smart homes equipped with security and energy efficiency.

Rise in foreign investments – Around $59.7 billion in private equity investment is expected by 2047, with a notable $1.8 billion already received in office stock in the first half of 2023 (report from KPMG).

Vastu Integration – Vastu-compliant properties are poised to create a bigger target market as more and more people understand the ancient art of science and architecture and incorporate these principles to efficiently streamline the flow of energy for a better lifestyle. At Vanshika Lifespaces, we understand the importance of these cultural values and incorporate Vastu principles in many of our projects. Visit our website to learn more about our projects and offerings.

The Future of Real Estate in India: What Lies Ahead?

As more people migrate to urban areas in search of better employment opportunities and lifestyle options, the demand for housing, commercial spaces, and infrastructure is steady, looking for innovative solutions in property management and managing the changing preferences for spacious homes. 

The future of real estate in India is promising, shaped by trends like sustainable development, technological innovations, and cultural preferences such as Vastu compliance. With strong economic fundamentals and government support, the sector is set to become a platform that offers immense opportunities for investors, developers, and stakeholders alike, and by understanding these trends and adapting to the changing market dynamics, developers can navigate the landscape and capitalise on the growth opportunities that lie ahead.

If you’re looking for properties that align with your values and aspirations, check out Vanshika’s Nature’s Harmony, offering nature-inspired homes, designed for the modern homebuyer. We are committed to creating sustainable and fulfilling living experiences that resonate with the modern Indian lifestyle.

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