India's housing market to see 5-10% annual price rise, says report

A CII-Colliers report projects housing demand to hit 500,000 units annually by 2030 and 1 million by 2047, driven by urbanisation, income growth, and policy reforms

Housing prices are likely to appreciate 5 to 10 per cent annually over the next few years on the back of strong demand driven by a growing working-age population and rapid urbanisation, according to a joint report by the Confederation of Indian Industry (CII) and Colliers.

 

What factors will drive housing demand growth in India?

 

Supported by increasing household incomes, favourable demographic trends, and forward-looking housing policies, India’s residential real estate market is expected to witness a significant surge in demand.

 

According to the report, this demand could reach 500,000 units annually by 2030 and potentially double to 1 million housing units by 2047.

   

“With the median age coinciding with the average home-ownership age and income levels growing substantially over the next few decades, housing sales, especially in the affordable segment, are expected to be on a steady upswing,” the report said.

 

Will luxury housing also see higher traction?

 

Luxury housing, too, is expected to gain momentum with an increasing number of high net-worth individuals (HNIs) and the growing preference of non-resident Indians (NRIs) to invest in their home country.

 

Additionally, the rise in India’s ageing population is expected to boost demand for senior living services, including medical care, insurance, and housing.

 

Which trends will support long-term real estate growth?

 

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

 

Beyond established markets, Tier-II and Tier-III cities — including emerging spiritual hubs — are also expected to evolve as vibrant housing markets, supported by urbanisation and infrastructure development.

 

“Further, redevelopment projects, aided by future-ready building development norms, transferable development rights (TDR), and zoning regulations, hold enormous potential to transform urban skylines and bridge demand-supply gaps in established markets such as Mumbai, Bengaluru, and Delhi-NCR,” it added.

 

How large can India’s real estate sector become by 2047?

 

The report projected that India’s real estate market could reach a valuation of $10 trillion by 2047, up from the current $0.3 trillion, driven by government reforms, infrastructure expansion, urbanisation, and technological innovation.

 

“Growth is expected across both residential and commercial segments, unlocking untapped potential in alternative asset classes such as data centres and senior living, along with advancements in logistics parks and commercial hubs,” the report said.