Projected growth: India's housing market expected to hit 93 million units by 2036

India’s real estate sector continues to expand, driven by sustained demand for housing and office spaces across the country, according to the Economic Survey 2024-25. Released ahead of the Union Budget, the survey attributes this growth to economic stability, positive market sentiment, and significant infrastructure developments, including metro expansions, road upgrades, and enhanced connectivity beyond Tier-I and Tier-II cities.

Projected Housing Demand

Citing research from real estate consultancy firms, the Economic Survey projected that India’s housing demand could reach 93 million units by 2036. Additionally, it noted that the residential property market had achieved an 11-year high in sales volume during the first half of 2024. Sales across the top eight cities registered an 11 per cent year-on-year growth during this period.

As of November 25, 2024, 11.8 million houses have been sanctioned, with 11.4 million under construction and over 8.9 million completed. In September 2024, PMAY-U 2.0 was introduced to support an additional one crore households. So far, 29 states and Union Territories have signed agreements to implement the scheme, and approval has been granted for six lakh houses in FY25.

Impact of Regulatory Reforms: RERA and GST

The Economic Survey underscored the role of regulatory reforms, particularly the Real Estate (Regulation and Development) Act (RERA) and the Goods and Services Tax (GST), in transforming the sector. RERA has brought multiple improvements to the real estate industry, including enhanced transparency, safeguards against fraudulent activities, timely project completions, and measures to prevent fund mismanagement. Following RERA’s implementation, India ranked 31st out of 89 countries in the Global Real Estate Transparency Index in 2024.

Update on RERA Implementation

The survey provided an update on the implementation of RERA, stating that as of January 6, 2025, all states and Union Territories — except Nagaland — had notified the RERA rules, and regulatory authorities had been established. It also reported that 1.38 lakh real estate projects and 95,987 real estate agents had been registered under RERA, while 1.38 lakh complaints had been resolved nationwide. The Real Estate (Regulation and Development) Act, 2016, was passed by the Rajya Sabha on March 10, 2016, and by the Lok Sabha on March 15, 2016. It received presidential assent on March 25, 2016, with some sections coming into effect on May 1, 2016, and the remainder from May 1, 2017.

GST's Role in Simplifying Taxation

The Economic Survey also highlighted the benefits of GST in the real estate sector. GST streamlined the taxation structure by implementing a single, uniform tax system across states. The survey mentioned that this had encouraged proper invoicing and documentation, thereby minimising tax evasion. The survey observed that Real Estate Investment Trusts (REITs) had further strengthened the commercial real estate sector. It noted that the government had introduced REITs as an investment tool, allowing investors to pool resources and invest in income-generating properties. This initiative has enhanced liquidity in the commercial real estate market and attracted institutional investors.

Digital Initiatives for Transparency

Additionally, it pointed out that online platforms for building plan submissions and approvals had helped reduce delays and improved transparency in the process. The Digital India Land Records Modernization Programme was also mentioned as a key initiative aimed at creating a more efficient and accessible land record management system.

(Except for the headline, nothing has been changed by All India News Network in the PTI copy.)