Real estate's contribution to India's GDP could rise from the current 8-9 per cent to 15-20 per cent by 2047, according to Knight Frank's International Partner and Senior Executive Director Gulam Zia. Speaking at the National Conference on Real Estate for Viksit Bharat organised by ASSOCHAM, Zia highlighted that the sector currently represents around USD 600 billion in size and accounts for about 8-9 per cent of overall GDP. He projected that India should aspire to have a real estate sector worth USD 8-10 trillion when the country's GDP reaches USD 25-30 trillion. As per ANI, Zia noted that when discussing the contribution of real estate to GDP going up from 8 per cent to 15-20 per cent by the time India reaches its 100th year of independence, the challenges are also multifold.
The expansion is expected across multiple segments including residential, office, warehousing, logistics, education and healthcare, as reported by Knight Frank. Zia noted that the office segment remains a bright spot despite concerns over artificial intelligence-related job losses, explaining that while jobs associated with older technologies are being affected, new technology-driven requirements are generating fresh demand for offices and skilled professionals. According to ANI, Zia emphasized that the same AI requirements are creating jobs for coders and other skilled professionals, making the office sector thrive. Global capability centres (GCCs) are also supporting office demand, while emerging asset classes such as warehousing, logistics, education and healthcare are expanding the overall real estate market.
India's residential real estate sector is entering the middle stage of its current cycle, with developers shifting focus from debt reduction to capital deployment, project execution and development of annuity assets, according to Nuvama Research. The report said cash EBITDA margins are expected to stabilise going ahead, while developers are likely to increase spending on land acquisition and annuity-generating assets. Cash EBITDA margins declined to 39 per cent in FY26 from 42 per cent in FY25, primarily due to a lower proportion of inventory being sold at launch stage, as reported by Nuvama. The balance sheet repair phase that characterised the sector in recent years is largely over, with developers now having stronger balance sheets, lower leverage and significant liquidity, supported by equity fund raising.
Residential demand has remained resilient with around 175,000 apartments sold across the top eight cities in the first half of the year, broadly similar to the corresponding period of the previous year, as reported by Knight Frank. Zia stated that these figures do not yet indicate that a downturn in the property cycle has begun. However, affordability is becoming a particular concern in major urban markets such as Mumbai, Delhi and Bengaluru, where premiumisation is putting increasing pressure on homebuyers. According to ANI, Zia said the figures did not yet indicate that a downturn in the property cycle had begun.
Despite the cyclical nature of real estate, Zia projected that the sector's long-term growth could remain in the range of 9-10 per cent annually. He emphasised that the sector's future growth would depend not only on continued expansion in premium housing and commercial real estate, but also on addressing the affordability challenge and widening access to housing for the common buyer. Looking ahead, Nuvama expects sales momentum and launch absorption to remain steady, with operating margins likely to remain stable to slightly lower while capital expenditure on land and annuity assets is expected to continue. The brokerage expects developers to have limited need for large-scale equity dilution as they increasingly use internal cash generation and debt to fund expansion.
