Current Real Estate Market Trends in Major Indian Cities

10 April 2024
Current Real Estate Market Trends in Major Indian Cities

The size of the Indian real estate industry is estimated to be 0.33 trillion US dollars in 2024. It is estimated to reach 1.09 trillion US dollars in 2029. This rapid growth can be attributed to the rising middle class and the country’s economic growth. Urbanization of TIER 2 cities, growing disposable incomes, and easy access to education have sparked interest amongst investors, developers, and home buyers. Amidst this positive outlook demand for housing and property prices have scaled up in the top 8 cities of India.

Let us look at the real estate trends in India:

1. Demand for Low-density housing

Projects with low-density housing options like villas townhouses and plots are in demand. Virtues of low-density housing like sustainable living, preservation of natural resources – air, water, and electricity and the presence of fewer houses are catching the home buyer’s attention. In response to this trend, developers are now building projects with an emphasis on harmony with nature, privacy, and space that are meticulously planned with world-class amenities, lush greenery, and open spaces.

2. Integration of Technology

Modern homes are now equipped with home automation systems to enhance the security, comfort, and convenience of the residents. New benchmarks are being set with the new-age smart homes that have IoT Devices, AI bots, and advanced security systems. Residents can enjoy enhanced security features and a seamless living experience which are a marked improvement from co-operative societies with a single security guard.

3. Luxury Living

The landscape of luxury living is transforming quickly due to the changing demographics and rising discretionary income of home buyers. The demand for luxury homes is rising among millennials who have the financial muscle to splurge on projects offering extravagant amenities and an uber lifestyle. Affluent investors have realized that luxury properties have high earning potential through rentals and resale pushing real estate investment.

4. Affordable housing

Most of the home buyer demographic in the country belongs to the middle-class working population. As a result, the demand for affordable housing in Tier 2 and Tier 3 cities is on the rise. As the infrastructure development improves in smaller cities the demand for affordable homes in new micro markets will increase. With central government schemes like the Pradhan Mantri Awas Yojna (PMAY) and state government initiatives, a great surge in affordable projects is expected in the coming years to meet the large demand for homes in this segment.

5. Rise of Tier 2 cities

The aftermath of the pandemic and the affordability of homes in Tier 2 cities have piqued the interest in Tier 2 cities. The demand has boosted infrastructure development improving the scope for the residential and commercial real estate in these new hubs of activity. The residential real estate market of cities like Kochi has beaten those of Tier 1 cities like Chennai and Kolkatta. The investment in cities like Jaipur and Vadodara is rising as these cities are poised for growth in the coming years.

The real estate sector is expected to continue growing driven by factors like rising demand for affordable and premium housing, macro-economic factors, and conducive regulatory frameworks. The growth will continue in all the major cities as well as in the Tier II and III cities.