India's real estate market is set to experience an extraordinary surge, expected to grow from $350 billion in 2023 to $1 trillion by 2030. This growth is attributed to factors such as rapid urbanization, the adoption of digital technologies, and innovative solutions in PropTech. As per the AURUM PropTech report presented at the India PropTech Summit 2024, urbanization is driving this transformation, with the urban population projected to reach 680 million by 2047. This demographic change will lead to a significant demand for housing, with 230 million additional housing units required to meet the growing needs.
One key insight from the AURUM PropTech findings is the increasing demand for rental housing, especially in top cities. Around 2 crore urban residents are seeking rental accommodation, but only 8 lakh organized and institutional rental units exist. This creates a 25x opportunity for PropTech solutions to bridge the demand-supply gap. With the urbanization of India and the changing preferences of Gen-Z and millennials, the rental market is undergoing a transformation powered by technology.
The report also sheds light on the role of regulations such as Small and Medium Real Estate Investment Trusts (SM-REITs), which are democratizing real estate investments. These regulations allow individual investors to participate in high-quality commercial assets, providing an opportunity to finance a substantial portion of India's real estate supply. SM-REITs are expected to play a crucial role in financing 32.8 Crore square feet of SM-REITable space across the country.
Digitalization is another critical factor driving the real estate market's evolution. According to the report, 75% of homebuyers now rely on digital platforms, and 50% engage in virtual property tours. This shift is reshaping how real estate transactions are conducted, with a growing preference for online platforms and digital marketing strategies. The Indian real estate sector is also witnessing increased demand for luxury and branded housing, particularly in Tier-II and Tier-III cities. Real estate marketing expenditures are rising, with an estimated ₹38,000 crore allocated annually to digital marketing efforts.
Technological advancements such as artificial intelligence (AI), blockchain, and immersive technologies like augmented reality (AR) and virtual reality (VR) are revolutionizing the industry. PropTech 3.0 is facilitating personalized property recommendations, automated content generation, and enhanced customer service through AI-driven tools. These technologies are streamlining transactions and improving customer engagement, offering unprecedented opportunities for both consumers and investors.
Onkar Shetye, Executive Director of AURUM PropTech, emphasized the role of technology in reshaping the real estate landscape. He highlighted that the convergence of technology, shifting consumer behavior, and supportive regulations is fostering innovation and disruption. The India PropTech Summit 2024 was a platform for industry experts to discuss these trends and explore the immense opportunities within the PropTech space, which is expected to offer a $100 billion opportunity in areas such as real estate rentals, distribution, and capital financing.
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