Technology and sustainability are driving a dynamic narrative of constant evolution in the real estate sector in 2024, with even greater changes expected in 2025.
India's real estate market is poised for transformation in 2024, driven by consumer shifts, technological advances and infrastructure growth. Trends such as affordable housing, luxury living, eco-friendly homes and integrated townships will shape the future. Supported by a strong economy and low lending rates, the sector is expected to grow at a CAGR of 9.2%.
The Suburban Resurrection: A New Era of Living
The shift from major urban centers such as Delhi, Mumbai and Bengaluru to quieter suburban areas is gaining momentum in 2024 and is expected to accelerate in 2025. Due to remote working, professionals are opting for spacious, affordable tier 2 and tier 2 housing. 3 cities in search of a better quality of life. With the Indian residential real estate market expected to grow from $227.26 billion in 2024 to $687.27 billion in 2029, at a CAGR of 24.77%, suburban living is becoming more viable. Improved connectivity through highways, subways and high-speed rail improves accessibility and combines rural tranquility with urban opportunities.
Luxury real estate: Increasing demand for prestige and comfort
While affordable housing dominates volumes, luxury properties remain a growing market segment driven by the demand for exclusivity, prestige and sophistication. In cities like Mumbai, Delhi and Bengaluru, luxury properties are becoming status symbols. In the first nine months of 2024, sales grew 37.8% year-on-year, with 12,625 units priced at Rs 4 crore or above sold, up from 9,160 last year. High-end features like private pools, state-of-the-art security measures and spaces that make remote working easier, including home offices and wellness rooms, are in demand. In addition, buyers are increasingly looking for homes that combine luxury with nature, emphasizing tranquility and urban elegance.
The evolution of commercial spaces: flexibility, functionality and technology
India's commercial real estate market is evolving, reflecting changing work and lifestyle patterns. Traditional offices are giving way to flexible, well-designed co-working spaces driven by the rise of the gig economy and startups. By 2025, modular furniture, flexible floor plans and break areas will dominate office environments. Aesthetic design, natural light, green spaces, ergonomic furniture and wellness zones will become more important as companies prioritize creating workspaces that reflect their brand, attract top talent while increasing productivity.
Co-living and rental apartments: meeting the needs of the new generation
India's young generation is reshaping housing trends, prioritizing convenience, community and lifestyle over traditional home ownership. Rental apartments and co-living spaces are flourishing, especially in job hubs like Bengaluru, Pune and Hyderabad. Co-living is expected to grow at a CAGR of 17% to $40 billion by 2025 and is aimed at young professionals and students seeking connectivity and social interaction. As the gig economy and remote work grow, developers are incorporating smart technologies, flexible leases and sustainable designs to meet millennials' demand for experiential living.
Green buildings: The future is sustainable
Finance Minister Nirmala Sitharaman's Union Budget 2024 lays out a roadmap for India to achieve net-zero carbon emissions by 2070, prioritizing sustainability. Real estate developers are increasingly focusing on green buildings, using sustainable materials such as recycled steel, bamboo and rammed earth. The aim of these buildings is to reduce energy consumption by 20-30%, water consumption by up to 50% and waste production, while improving the well-being of residents and increasing property values by up to 10%. With the construction industry accounting for 22% of India's carbon emissions, adopting eco-friendly practices is crucial. Government incentives for sustainable building will further accelerate the adoption of green buildings.
The way forward: Technology and infrastructure drive growth
Smart cities, urban redevelopment and improvements to transport networks will further stimulate demand for real estate in both metropolitan and suburban areas. The introduction of PropTech – real estate technology – will revolutionize the way buyers and developers interact with the market. Virtual tours, AI-driven real estate analytics and blockchain for real estate transactions are becoming integral tools in the real estate ecosystem, making the buying, selling and renting processes faster, more transparent and efficient.
Festive investment boost from home buyers
The festival season has always been an important sales period in India as home buyers are eager to invest in properties, especially during Diwali, Dhanteras and the week leading up to New Year. Builders and developers are anticipating higher demand during this period and are offering attractive offers, discounts and incentives to attract the attention of potential buyers. Given the strong demand for housing during the festive season, sales in the October-December 2024 quarter are expected to match or exceed the previous three quarters average of 75,000 units, taking the total sales for the year to around 3.05 lakh units.
Conclusion: Embrace the future
India's real estate market looks forward to a promising future, with growing demand for affordable and luxury housing, flexible workspaces and sustainable development. The integration of technology and innovation will drive the industry forward. Trends for 2025 and beyond will shape vibrant, diverse and dynamic cities and communities across India.
Real estate market growth in 2024
- MMR market performance: MMR recorded over 105,664 property registrations from January to September, a 12% increase from 2023. Residential properties accounted for 80% of registrations.
- Rise in luxury real estate: Luxury properties above Rs 2 lakh crore accounted for 23% of total registrations in the MMR, up from 18% in 2023.
- Pune's growth: Pune's real estate market grew 15% year-on-year in the first quarter of 2024, with a strong focus on mid-range (Rs 40-80 lakh) apartments.
Important real estate segments in 2024
- Residential Dominance: Residential properties lead the market, with sales expected to reach 300,000-315,000 units by the end of 2024.
- Rise in the luxury market: Luxury real estate saw a 75% increase in sales, with the luxury segment accounting for 25% of MMR transactions.
- Affordable Housing Trends: Affordable homes (priced below ₹ 50 lakh) still held 52% market share but saw volume decline.
The author of the article is Ram Naik, co-founder and director of The Guardians Real Estate Advisory.