The real estate sector is one of the key contributors to India’s GDP, accounting for 7.3%. It is also a major industry for generating employment. 

Real estate has witnessed phenomenal growth over the last few years. This is because of rapid urbanization, increasing disposable income, the Government’s focus on infrastructure development and the push for affordable housing. The future of Indian real estate looks bright. 

Real estate sector is expected to contribute 13% to the country’s GDP by 20251. The market size of the real estate sector in India is forecasted to be US$ by 20302. Indian real estate is a preferred investment choice for domestic and global investors. 

As we approach 2025, let’s look at some key real estate trends that will catalyse this growth. From the new concept of REIT to affordable housing and digitization in real estate, these trends promise to redefine the landscape of this ever-growing industry.

Key Trends in Real Estate 2025

1. Boost to Affordable Housing

The Indian Government has recognised the need to address the housing requirements of the urban population. Currently, the affordable housing segment in India is valued at USD 3.17 billion in 20243. With a CAGR of 19.8%, this is expected to become USD 9.46 billion by 20302. This surge is backed by increasing demand from India’s growing middle and lower-middle-class population, coupled with the Government’s initiative. 

In the Union budget 2024, the Government announced that under the Pradhan Mantri Awas Yojana 2.0, the housing needs of 1 crore poor and middle-class families will be addressed with an investment of Rs 10 lakh crore3. The investment includes Rs 2.2 lakh crore of central assistance over the next 5 years. The Government aims to construct over 3 crore houses under the PMAY scheme in rural and urban areas.

The Government provides tax benefits to first-time homebuyers, encouraging them to invest in property. Even the GST applicable on affordable housing is just 1%

The affordable housing segment is set to remain a part of India’s vital real estate landscape. At Marathon, we are building next-generation affordable homes in Mumbai. Marathon NeoHomes, Bhandup. At NeoHomes, we have launched 6 towers. We have 100 acres of planned development in Bhandup with 5000+ homes being planned.

2. Increased Interest in REIT

Real Estate Investment trust (REIT) is a relatively new concept in India. The potential of the Indian REIT market is untapped. The Indian REITs only represent 13.7% of the total real estate in India4. However, this can grow multifold in the coming years. ICRA, a premier rating agency, predicts a substantial growth potential in the REIT-ready office supply market, forecasting an expansion of 6.0–6.5 times. 

The REIT makes real estate investment in India easy for the end user. It offers a well-arranged mechanism for income generation and asset appreciation. In 2025 and for the next few years, the outlook of REITs in India looks promising.

3. Digitization in Real Estate

Over the last few years, technology has had a paradigm shift in the real estate industry. Virtual home tours, renders of amenities, drone shots, neighbourhood insights, HD images, and property descriptions have provided an immersive experience. The convenience of virtual home tours, comparing prices by applying filters, and searching for RERA details has become a hallmark of the digital property hunting experience. 

As the use of technology keeps increasing, the adoption of emerging trends like AI, IoT, and Machine learning will also increase. According to KPMG, generative AI in real estate is expected to grow at a CAGR of 11.2% in the coming years5. 

In 2025, if developers want to stay ahead of the competition, they need to up their digital presence.

4. Infrastructure-Led Real Estate Growth

Infrastructure development is closely linked to real estate growth. Whenever a big infrastructure project nears completion, the real estate markets in neighbouring areas experience increased demand. For example, Navi Mumbai is on the cusp of high infrastructure development. The Atal Setu, India’s longest sea bridge providing quick connectivity from Mumbai to Navi Mumbai is already operational. With the upcoming Navi Mumbai International Airport nearing completion, property prices may witness an upswing in areas like Panvel, Ulwe, Uran, and other adjoining areas. The infrastructure in Mumbai is picking up – Goregaon-Mulund Link road, Panvel-Karjat Railway line, Virar-Alibagh Multimodal corridor, and many such projects will bring plenty of growth in peripheral areas of Mumbai.

5. Luxury Homes That Offer a Lifestyle

Luxury housing is witnessing remarkable growth in India. According to a report from CNBC, out of over 1 lakh homes sold in Q1-FY24 across 7 cities, the sale of luxury homes (priced above INR 1.5Cr) accounted for a 21% share. In Mumbai alone, as per Business Standard, the sale of luxury homes in the first half of 2024 saw an 8% surge compared to the same period in 2023. 

This increasing trend reflects that today people when people look for homes, they also look for a complete lifestyle experience. Homes with world-class amenities like gym, swimming pool, recreational spaces, garden and amenities that cater to people across all age groups are a preferred choice for homebuyers. These features not only add convenience and fun but also help build a feeling of community. Developers should focus on creating luxury homes that offer amenities, views, and vibrant community life, as these factors are key in influencing buyers’ purchase decisions.

At Marathon, the luxury residential projects we have built have become iconic addresses. Monte Carlo in Mulund is a pinnacle of luxury and exclusivity, with only 2 flats per floor. Mulund has never seen such a project, and may never see it again. Monte South, a joint venture between Adani Realty and Marathon Group is SOBO’s prominent project.

6. Sustainable Living

Sustainable living is an important part of people’s life. Developers are increasingly incorporating energy-saving designs and eco-friendly materials to meet homebuyer’s desires for green living spaces. Homes with eco-friendly design not only reduce utility bills but also enhance comfort. HVAC systems have become a common part of commercial buildings.

According to ET, 82% of new Grade A supply is Green Certified, reflecting a growing trend. Today, developers are increasingly seeking certifications like IGBC and LEED to showcase their commitment to sustainable development. At Marathon, we have recognised this trend for a long time. Marathon Futurex built by us is a Grade-A commercial tower in Lower Parel. It is IGBC-rated and features an HVAC system that reduces operational costs.

Conclusion

The Indian real estate market has seen terrific growth post-COVID era. Real estate investment in India will continue to grow on the backdrop of the Government’s support, and increasing adoption of technology. The dawn of a new era in real estate lies ahead of us.