The Big Deal: Unlocking India’s Real Estate Potential of $10 Trillion

By Pankaj Jain

New Delhi, March 11, 2025: In the outskirts of Delhi NCR, a luxury residential project sells out even before it is launched. Likewise, in Gurugram, ultra-luxury projects are lapped by buyers and sport sold out tag within a few days of their launch. The retail segment is witnessing frenetic activity, mixed-use projects are being regularly launched, commercial including office segments are also recording brisk sales and unsold inventory remains at healthy levels. These snapshots encapsulate a sector in hyperdrive: India’s real estate market isn’t just growing—it’s rewriting the rules of economic possibility.

With a massive transformation taking place due to demographic shifts, policy reforms, and a hunger for urban lifestyle, analysts now predict the sector could balloon to a jaw-dropping $10 trillion by 2047. In 2024, India’s real estate market showcased robust momentum, witnessing significant growth across its residential, commercial, and premium sectors. But the story is not just about skyscrapers and shopping malls but also about boosting the economy, more jobs, aspirations, and the quiet revolution of a middle class demanding better homes, smarter offices, and greener cities.

The Numbers Don’t Lie – But They Only Tell Half the Story

Let’s start with the hard numbers. According to data released by Mordor Intelligence, an estimated half of India’s population will live in urban centres by 2047. This shift will lead to an increase in demand for residential, office spaces and retail spaces.

The sector employs 18 per cent of India’s workforce—that’s 100 million people, making it the second-largest employment generator in the county. It contributes 7.3 per cent to GDP today, but drill deeper, and the real magic emerges. No wonder global investors are circling: private equity inflows hit $1.5 billion in warehousing alone this year, while REITs now manage 114 million sq. ft. of prime offices and malls.

Residential sales in premium segments (Rs 1 crore+) have exploded from 16 per cent of the market in 2018 to 43 per cent today as reported by Business Standard. But this isn’t just about luxury—it’s about generational change. Gen Z doesn’t want their parents’ cramped apartments; they want gyms, co-working lounges, and pet parks.

Retail Real Estate Gets Wings

At the same time, the Indian retail market is also growing exponentially. It is expected to reach over INR 190 trillion by 2034 according to a BCG-RAI report. This growth is propelling the development of commercial real estate. As brands expand their footprint—both online and offline—the demand for premium retail spaces, warehouses, and experiential hubs is skyrocketing.

This is despite the fact that in the last eight years, India’s retail sector has witnessed an average of a mere 2.5 MSF of Grade-A mall developments commence operations as per a Cushman & Wakefield study. However, the same report estimates a need for around 55 million square feet (MSF) of Grade-A mall space over the next four years to keep pace with the market.

Equities vs. Real Estate: Where to Invest

While equities like the Nifty 500 offer 18.2 per cent annual returns compared to real estate’s modest 4.3 per cent price growth, as per an expert reported in Business Today (BT Money), the comparison ignores critical nuances. Real estate silently pads returns with 2.5-3.5 per cent rental yields, leverages borrowed capital (e.g., INR 40 lakh loans on INR 10 lakh down payments), and offers tax perks on mortgage interest—advantages absent in stock portfolios. Equities may sprint ahead in raw growth, but the property’s stability and amplified leverage appeal to risk-averse, long-term investors. Yet, risks differ: stocks swing wildly but sell in seconds; real estate ties up capital for months. Bottom line? Equities fuel wealth faster, but real estate builds it steadier.

The Bottom Line: Betting on Bharat

For developers, it’s a gold rush—if they adapt. For homebuyers, a chance to ride the biggest wealth creation wave since IT. And for India? A $10trillion sector that could lift 200 million into the middle class by 2040. Real estate isn’t about property anymore. It’s about building the India our grandchildren will inherit.

The takeaway? Whether you’re buying, investing, or career-building, India’s real estate boom is too big to ignore. But tread wisely—the smart money’s on sustainability, tech integration, and Tier-II cities.

The author is Chairman and CMD of the SPJ Group