India’s population is expected to surge to 1.7 billion in 2047 with close to 51% of the individuals residing in urban areas. To accommodate the urban population, cities in India would require 230 million housing units by 2047. This projected data was shared as part of the ‘Vision 2047’ report, unveiled by the National Real Estate Development Council (NAREDCO) and Knight Frank, on Saturday in Hyderabad.
The Vision 2047 report was released as part of NAREDCO’s silver jubilee Foundation Day celebration. Experts from the real estate sector shared their insights on the transformation of real estate sector. Former Vice President M Venkaiah Naidu, speaking on the occasion said: “Happy affordable housing for all is the need of the hour. While the real estate sector is growing at a rapid pace, we must see to it that it is affordable. Any government should not allow any encroachment and then the growth has to be planned. While planning, they should ensure that people who will be residing there are happy with the infrastructure.”
The report underscores that there will be a gradual transition towards mid-segment and luxury housing options. Notably, the proportion of lower-income households is projected to decrease from the present 43% to a mere 9% by 2047. This shift will see a substantial portion of the populace ascending to lower middle and upper middle income brackets. In terms of market valuation, the anticipated residential demand has the potential to yield a staggering output equivalent to $3.5 trillion by 2047.
Shifting the focus to the commercial real estate arena, the report unveils that the cumulative office space across India’s top eight cities escalated from 278 million square feet in 2008 to 898 million square feet presently. With Knight Frank’s estimations forecasting India’s economy to expand to a robust 36 trillion dollars by 2047, around 69% of the workforce is anticipated to be formally employed. In light of this, the demand for office space to accommodate growing economic activities and formal employment is expected to surge significantly in the coming years. This surge holds the potential to generate an economic output akin to $473 billion by 2047.
Additionally, the report highlights the current status of organised retail consumption, which presently accounts for a mere 4.6% of the total private consumption. This figure pales in comparison to developed markets like the US, where retail consumption constitutes a substantial 40% of private consumption. However, as income levels rise and Indian households exhibit a greater propensity for consumption, the projected estimate for 2047 envisions retail consumption claiming a share of 37% of the total private consumption, aligning more closely with developed market patterns. This transformation is anticipated to coincide with India’s growing economy, which is projected to reach $36.4 trillion by that time.
“The next 25 years are going to witness a dramatic transformation in the Indian economy and the real estate sector. For sustainable growth, it is imperative that India’s real estate sector adapts to transformations in the economy and changing technologies, making optimum use of the growing resources, especially the human capital,” chairman and managing director of Knight Frank India Shishir Baijal said.
