MUMBAI: The real estate sector is seen reaching $1.5 trillion by 2034, more than trebling from $482 billion, constituting 10.5% of the total economic output, up from 7.3%last year, over the next decade, says an industry report.
Of the $1.5 trillion valuation, the residential market is expected to lead with a value of $906 billion, followed by the office sector contributing $125 billion, according to a weekend note by realty consultancy Knight Frank and industry lobby CII. Land for manufacturing activities is estimated to be $28 billion, while warehousing is projected to yield revenues of $8.9 billion, the report adds.
The report sees cities requiring 78 million new homes by 2034, and this could push the market to a value of $906 billion worth of new homes because as much as 42.5% of the 1.55 billion population will be living in cities by 2034.
Under favourable conditions for these drivers and assuming an annual 2% depreciation of the rupee against the dollar, the national GDP could be $10.3 trillion by 2034. The proportion of high networth individual and ultra high networth individual households is expected to rise from 3 % now to 9%by 2034, which will drive demand for luxury housing.
In 2008, the top eight cities accounted for 278 million sq ft office stock which has now increased to 900 million sq ft and this is seen jumping 2.7 billion sq ft by 2034, which means an additional requirement of 1.7 billion sq ft in a decade. As the sector scales up, the potential revenue generation from office real estate is seen $125 billion. The report expects GCCs driving office market in the next decade.