India’s housing market is poised for a remarkable transformation by 2025, driven by rapid urbanization, technological innovations, and changing consumer preferences. With its critical role in the economy, the housing sector is expected to contribute 13% to the national GDP by 2025, reflecting its resilience and potential. Projected to grow into a $1-trillion market by 2030, the sector is evolving in response to demographic shifts, policy reforms, and global trends, as highlighted in the recent CREDAI-EY report.
Tier II and III cities are emerging as pivotal growth hubs, with smaller urban centers like Jaipur, Indore, and Kochi driving more than 40% of new housing developments by 2025, according to the CREDAI-Colliers report. Improved infrastructure, affordable land prices, and government programs like the Smart Cities Mission are attracting both developers and residents to these cities. Urban migration trends indicate a 15% population growth in smaller cities by 2030, supported by initiatives such as Bharatmala and Gati Shakti. For instance, Indore alone is expected to welcome over 100,000 new residents annually by 2025, positioning itself as a leading real estate destination.
Commenting on this shift, Avneesh Sood, Director of Eros Group, says, “India’s housing market is on the cusp of a significant transformation. The rise of Tier II and III cities as housing hubs highlights the dynamic opportunities that lie beyond metro regions. These cities are becoming growth engines, offering sustainable, affordable, and innovative housing solutions that cater to the aspirations of a growing middle class.”
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India’s burgeoning middle class is another critical driver of housing demand, with approximately 50 million households projected to have annual incomes exceeding ₹30 lakh by 2025. This marks a notable shift in housing preferences, with mid-income and premium housing segments taking center stage. The urban homeownership rate is set to increase to 72% by 2025, up from 65% in 2020, supported by affordable financing options and a younger demographic entering the housing market. Millennials and Gen Z buyers are expected to comprise 60% of new homebuyers by 2030.
According to the National Housing Survey 2024, 30% of buyers in the ₹50-₹90 lakh range prioritize energy-efficient homes, reflecting the growing importance of sustainability in purchase decisions.
Sustainability, once considered a luxury,
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