With growing investments, government policies, and eco-friendly initiatives, the construction industry is expected to play a significant role in the Indian economy.
Two industries stand out as the main drivers of growth as India plots its economic route for 2024: real estate and infrastructure. The main explanation for this is the close interaction between the two elements of a nation’s progress, which creates a symbiotic relationship that greatly affects both urban development and economic advancement.
The quality and accessibility of infrastructure, in turn, has a significant impact on the demand for and value of real estate. Property values in well-connected places rise when there are well-developed transport systems, such as public transport, airports, and roads, which increase the desirability of real estate.
Furthermore, real estate developments are made more appealing by the presence of public amenities and utilities. On the other hand, as real estate development occurs, more infrastructure becomes necessary in order to accommodate expanding populations and changing urban environments.
According to a recent NAREDCO analysis, the real estate industry is anticipated to reach a $1 trillion market size by 2030 and increase at a compound annual growth rate (CAGR) of 18.7% between 2020 and 2030. Real estate and infrastructure together have the potential to emerge as the main drivers of the Indian economy, driven by a number of variables including rising investments, government policies, and sustainability programmers.
increasing influx
A number of causes are contributing to the real estate boom in India. Urbanisation, government initiatives, and demographic trends have all increased demand for residential real estate. In 2023, it was projected that the key marketplaces of leading cities such as Delhi-NCR, Mumbai Metropolitan Region, Chennai, Kolkata, Bengaluru, Hyderabad, and Pune saw a 30% increase in housing sales, amounting to an astounding 4.74 lakh units. In terms of volume and value, this is an all-time high for the Indian real estate market. The total sales value of residential properties has increased to an astonishing ₹4.5 lakh crore, driven by larger ticket-size transactions.
Value growth, luxury, and mid-segment housing have driven demand in 2023 and will do so again in 2024 against a backdrop of strong rental returns. In addition, the importance of affordable housing has increased as a result of cooperation between legislators and developers in order to provide the growing middle-class population’s housing demands. In addition to spurring building activity, the government’s emphasis on affordable housing developments has helped to improve employment prospects in the industry.
The commercial real estate market is changing as well. Reevaluating office spaces in response to the growing popularity of remote work has raised demand for technology-enabled solutions and flexible workspaces. This flexibility in the commercial real estate market demonstrates the industry’s adaptability and ability to change with the demands of changing work environments.
Growth as an Initiator
India’s economic growth has been significantly fueled by the expansion of its infrastructure, and this trend is expected to hold in 2024. The government’s aim to improve connectivity and logistics throughout the nation is demonstrated by its support of significant infrastructure projects like the Bharatmala Project and the Sagarmala Programme.
Infrastructure investments for renewable energy are especially notable since they support India’s commitment to sustainable development. By 2025, it is anticipated to have 280 GW of renewable energy capacity, offering both environmental advantages and business prospects in the rapidly expanding green energy industry.
India’s focus on infrastructure and real estate development is demonstrated by a number of initiatives. The bullet train project, also known as the Mumbai-Ahmedabad High-Speed Rail Corridor, Mumbai Coastal Road, Mumbai Trans Harbour Link (MTHL), Mumbai Metro Navi Mumbai International Airport’s Aqua Line, and Noida International Airport. These initiatives represent the country’s advancement in cutting-edge transport infrastructure. India’s dedication to establishing contemporary, effective urban environments is shown in the Smart Cities Mission, which places a strong emphasis on urban development and technological integration.
Changes in the economy
India is leading the way in economic revival in 2024, with infrastructure and real estate emerging as the main development engines. A strong commitment to national development is reflected in the real estate sector’s momentum, which is supported by programmes for affordable housing, the demand for mid-segment and premium homes, and the game-changing effects of infrastructure projects. By 2030, the real estate and construction industries combined will make up one-fifth of the economy and provide 100 million new jobs, according to data from Knight Frank India.
The focus on these vital industries places India in a position for sustainable growth, the creation of jobs, and increased global competitiveness as it navigates the opportunities and difficulties of the current economic landscape.
A new age for Bharat is being heralded by the convergence of infrastructure and real estate development, which promises a more wealthy and bright future.