Housing prices to rise 5-10% annually over next few years on strong demand

Housing prices are likely to appreciate 5-10 per cent annually over the next few years on better demand, according to a joint report by CII and Colliers.

Industry body CII and property consultant Colliers India released a report on Thursday titled 'Real Estate @2047: Building India's Future Growth Corridors' in a conference held here. The report was released by Harleen Kaur, Deputy Secretary, Ministry of Road Transport and Highways.

The report projected that annual sales could jump from 300K-400K units currently to 100K units by 2047.

"Annual sales can potentially double and reach 1 million housing units by 2047, driven by rising income levels, demographic shifts and progressive housing policies.

"Furthermore, driven by rising incomes, urban migration, and premium housing demand, average property prices are projected to grow at 5-10 per cent annually over the next few years," it added.

Colliers India noted that the growth in sales and prices will be supported by improved infrastructure, government incentives for homebuyers, and a growing preference for reputed developers.

Beyond the established housing markets, the consultant said that Tier II & III cities, including spiritual hotspots, are poised for a sustained rise in housing demand in the coming decades.

The report also projected that the Indian real estate market size would surge from $ 0.3 trillion in 2025 to $ 5-10 trillion by 2047.

"India's infrastructure expansion is reshaping the real estate landscape, unlocking new growth corridors and transforming Tier II & III cities. As we march towards a multi-trillion-dollar economy, the demand for world-class built structures, integrated logistics hubs and resilient mobility solutions, including transit-oriented development (TOD) systems, will become more prominent," Kaur said in a statement.

She noted that the real estate and infrastructure are two vital sectors which will reinforce each other.

"Expressways and industrial corridors will increasingly enhance connectivity - transforming land usage in catchment areas, accelerating urban development, and creating commercially viable economic hotspots," Kaur said.

India must continuously enhance tech adoption in real estate and infrastructure to ensure sustainable growth, said Pradeep Aggarwal, Founder and Chairman of Signature Global India Ltd.

"The ongoing real estate transformation will be characterised by significant scaling up across asset classes. In addition to demand traction in core assets such as office, residential and industrial & warehousing, we anticipate quantum growth in alternative asset classes such as data centres and shared living," said Badal Yagnik, Chief Executive Officer and Managing Director of Colliers India.