By Rakesh Reddy, Director, Aparna Constructions
The Indian residential real estate sector has experienced remarkable growth in 2024, reflecting its resilience and adaptability to changing market dynamics. This year has been pivotal, with the sector aligning with evolving consumer expectations by incorporating sustainability, technology, and premium living standards. While Tier 1 cities such as Mumbai, Bengaluru, Hyderabad, and Delhi-NCR have traditionally dominated the real estate landscape, 2024 has marked the rise of Tier 2 cities. These emerging hubs offer enhanced quality of life, spacious living, and modern amenities, making them increasingly attractive to homebuyers prioritizing comfort, advanced technology, and sustainability. Urban migration, infrastructure development, and rising disposable incomes have further cemented their status as viable alternatives to metropolitan centers.
Surge in Luxury Housing Demand
Luxury housing has witnessed a significant upswing in 2024, with luxury home sales recording a 37.8% growth between January and September. This surge is driven by affluent buyers, including Non-Resident Indians (NRIs), seeking properties that emphasize wellness-oriented amenities, expansive layouts, and private outdoor spaces. High-end properties have become synonymous with premium living and holistic lifestyles. Younger professionals and nuclear families now dominate the real estate market, with nearly 60% of buyers under the age of 35. This demographic shift underscores a growing perception of real estate as a long-term investment. Developers have responded by integrating green-certified properties, energy-efficient designs, and renewable energy solutions into their projects, meeting the rising demand for eco-friendly and tech-savvy homes.
South India’s Real Estate Growth
The real estate market in South India has shown exceptional growth in 2024, bolstered by a robust economy and increasing urbanization. Tier 1 cities such as Hyderabad, Bengaluru, and Chennai continue to attract substantial investments across residential, commercial, and industrial segments. Hyderabad has emerged as a prominent real estate hub, with a 10% compound annual growth rate (CAGR) in residential launches. Its strong infrastructure, vibrant tech ecosystem, and business-friendly environment have drawn IT professionals and expatriates seeking spacious and sustainable homes. Multinational corporations’ preference for the city has also driven demand for Grade-A office spaces and premium residential projects.
Bengaluru, known for its global tech reputation, complements this trend by meeting the needs of professionals with sustainable and smart housing options. The city’s commercial real estate segment, particularly coworking spaces, has also seen robust demand. Chennai’s industrial and IT growth is mirrored in its residential and retail real estate expansion, supported by improved connectivity through metro projects. Meanwhile, Goa, traditionally a tourist destination, has experienced rising demand for vacation homes and lifestyle properties, driven by NRIs and remote workers.
North India’s Dynamic Real Estate Market
North India continues to be a vibrant real estate market, with Delhi and the National Capital Region (NCR) leading the way. Gurgaon and Noida have emerged as key hubs for IT, retail, and corporate offices, offering both luxury and affordable housing to cater to diverse income groups. Ongoing infrastructure projects, including metro expansions and smart city initiatives, are fueling growth in this region. Varanasi, historically known for its cultural significance, is undergoing a transformation with modern residential complexes, commercial spaces, and retail developments. Government initiatives such as the Smart City Mission and infrastructure upgrades are positioning Varanasi as a rising star in North India’s real estate landscape.
Rise of Tier 2 Cities
Beyond metropolitan centers, Tier 2 cities like Visakhapatnam, Vijayawada, Guntur, Mangalore, Mysuru, Coimbatore, Kochi, and Thiruvananthapuram are gaining prominence. Urbanization, improved connectivity, and rising disposable incomes have unlocked immense potential in these regions. These cities offer a blend of modern amenities and affordability, appealing to a diverse demographic. The entertainment and leisure sectors in Tier 2 cities have also expanded, driven by multiplexes, shopping malls, and family entertainment centers. These developments complement the booming real estate market, as developers invest in high-quality residential and commercial projects.
Shifting Demographics and Evolving Preferences
The Indian real estate sector is witnessing distinct demographic trends shaping its trajectory. Tier 1 cities continue to attract young professionals, drawn by abundant career opportunities in IT and finance. Meanwhile, Tier 2 and Tier 3 cities are seeing a surge in demand from middle-income groups and NRIs seeking affordable yet modern housing options. Younger buyers, predominantly under 35, prefer urban-style apartments with advanced amenities, while retirees and high-net-worth individuals (HNWIs) opt for villas or gated communities in serene locales. Developers are responding with tailored housing solutions that cater to these diverse preferences.
Role of General Contractors and Technology
General contractors play a pivotal role in the sector’s growth, managing construction projects and ensuring timely delivery. Government initiatives like the Smart Cities Mission and affordable housing schemes have increased demand for skilled contractors, creating job opportunities across engineering, project management, and skilled labor sectors. The adoption of modern construction technologies has further expanded roles in tech-driven fields, empowering the workforce and boosting the economy.
Outlook for 2025 and Beyond
With 2025 on the horizon, the future of Indian real estate appears even more promising. The sector is poised for sustained growth, with a projected CAGR of 10% in volumes over the next 3-5 years. Reports indicate that the size of the real estate industry could reach USD 1 trillion by 2030, driven by continued infrastructure development and a robust economy. In 2025 alone, the sector is expected to grow by 25%, fueled by strong consumer demand and favorable government policies.
Sustainability will remain central to this growth, with developers prioritizing energy-efficient designs and homes powered by renewable energy. Smart home technologies, automation, and advanced safety features will further revolutionize residential living, catering to the needs of a tech-savvy generation. Enhanced transparency through digital platforms and strengthened regulations will foster greater buyer confidence, ensuring a secure investment environment. These trends underscore a transformative phase for Indian real estate, positioning it as a key contributor to the country’s economic development.
