The market size of real estate in India is expected to increase at a CAGR of 15.2 per cent during FY2008 – 2028E and is estimated to be worth USD853 billion by 2028. Real estate contribution to India’s GDP is estimated to Market size of real estate in India (USD billion) increase to about 13 per cent by 2028.
According to data released by Department of Industrial Policy and Promotion (DIPP), the construction development sector in India has received Foreign Direct Investment (FDI) equity inflows to the tune of US$ 24.19 billion in the period April 2000- March 2016. The Government of India along with the governments of the respective states has taken several initiatives to encourage the development in the sector. The Smart City Project, is a prime opportunity for the real estate companies.
Real estate plays a critical role in the development of the Indian economy. It is the second largest employer after agriculture.
Over the next decade, the real estate sector is expected to grow by 30 per cent.
The sector is divided into four sub-sectors: housing, retail, hospitality, and commercial. The housing sub-sector contributes five-six per cent to the country's gross domestic product (GDP).
Retail, hospitality and commercial real estate are also growing significantly, catering to India's growing needs of infrastructure.
The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy, according to a study done by ICRA.
A unit increase in expenditure in this sector has a multiplier effect and the capacity to generate income as high as five times.
The positive effects of growth in real estate sector are spread over more than 250 ancillary industries.
The Indian real estate market size is expected to touch US$ 180 billion by 2020.
Recent growth in the Indian economy has stimulated demand for land and developed real estate across industries. Demand for residential, commercial and retail real estate is rising throughout India, accompanied by increased demand for hotel accommodation and improved infrastructure.
India is going to produce an estimated 2 million new graduates from various Indian universities during this year, creating demand for 100 million square feet of office and industrial space.
Presence of a large number of Fortune 500 and other reputed companies will attract more companies to initiate their operational bases in India thus, creating more demand for corporate space.
Apart from IT, ITES and Business Process Outsourcing (BPO), India has shown its expertise in sectors like auto-components, chemicals, apparels, pharmaceuticals and jewellery where it can match the best in the world.
These positive attributes of India is definitely going to attract more foreign investors in the near future.
The real estate sector in India is ready to take a big leap in the coming years.