Real estate is one of the fastest growing sectors of the Indian economy and contributes about 5 per cent to India's gross domestic product (GDP). The country's economic growth is driving the demand for real estate in India. Demand for residential space is expected to grow at a compound annual growth rate (CAGR) of 19 per cent between 2010 and 2014 - Tier 1 metropolitan cities are expected to account for about 40 per cent of this. Indian real estate sector is the fourth largest sector in terms of foreign direct investment (FDI) in the country. During April 2012-January 2013, the sector accounted for 8.8 per cent of total FDI inflows into India. FDI in the sector is estimated to grow to US$ 25 billion in the next 10 years. Growing requirements of space from sectors such as education and healthcare provide opportunities in the real estate sector. Growth in the number of tourists has resulted in demand for service apartments.

  • Real estate contributes about 5 per cent to India’s GDP
  • The total revenue generated in FY11 stood at USD66.8 billion
  • The urban housing shortage is estimated at 18.8 million in 2012
  • The housing shortage in rural India stood at 47.4 million as of 2012
  • The housing shortage in urban and rural India will be around 21.7 and 19.7 million units respectively in 2014
  • Significant increase in real estate activity in cities like Indore, Bhopal, Raipur, Ahmadabad, and other two-tier cities; this has opened new avenues of growth for the sector

Demand for residential spaces expected to grow sharply.

  • A localised,fragmented market presents opportunities for consolidation Few large, pan-India players .
  • Rapid urbanization Rise in the number of nuclear families Easy availability of finance Repatriation of NRIs and HNIs
  • Demand to grow at 19 per cent between 2010 and 2014 - 40 per cent of this from Tier 1 cities At 3x to 4x, demand-supply gap is highest in the low and mid income segments
  • Increase in real estate projects in two-tier and three-tier cities

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