The Real Estate Market in 2024: A Comprehensive Guide to Upcoming Trends

The real estate market in India is poised for robust growth in 2024, driven by positive economic indicators, favorable government policies, and rising demand across various segments [2] [3] [5]. The residential sector, in particular, is expected to maintain its strong momentum, with metro cities like Mumbai, Delhi NCR, and Chennai leading the surge in housing sales [4].

Factors such as stable interest rates, increasing property prices, and the government’s emphasis on affordable housing initiatives are anticipated to drive the real estate market’s growth [2] [4]. Additionally, the rental market may slow down as more people prefer homeownership, while office spaces and private equity investments in segments like logistics and data centers are attracting interest [4] [6]. Overall, India’s position as one of the fastest-growing economies globally, coupled with private consumption and capital formation, makes the real estate sector an attractive investment option [4].

Homes with Integrated Lifestyle Amenities

Homebuyers are increasingly seeking projects that offer amenities like gyms, swimming pools, play areas, community halls, and landscaped gardens to enhance their living experience [7]. Developers are creating self-sufficient townships with homes, schools, shopping centers, and healthcare facilities to cater to this demand for an integrated lifestyle [7].

Amenities for Convenience and Community

  1. Fitness centers, swimming pools, and recreational areas are being integrated into residential projects to promote an active and healthy lifestyle [8].
  2. Co-working spaces and lush green landscapes are being incorporated to facilitate work-from-home arrangements and provide a serene environment [8].
  3. Developers are adding amenities like:These amenities create a more enjoyable living experience and foster a sense of community [10].
    • Swimming pools
    • Gyms
    • Spas
    • Salons
    • Gardens
    • Play areas

Proximity and Appreciation Potential

Homes in proximity to workplaces and urban conveniences have higher appreciation potential due to their desirable locations [7]. This trend has led to the development of lifestyle homes that offer easy access to offices, shopping centers, and other amenities.

Demand for Independent Floors

There has been a notable uptick in demand for independent floors, driven by the desire for low-density living [3]. This trend aligns with the growing preference for integrated lifestyle amenities and a more spacious living environment.

Tier II City Expansion

Between January and September 2023, around 35 prominent domestic and international retail brands expanded their presence into 14 Tier II cities [9]. This expansion indicates a growing appetite for high-street brands and lifestyle amenities beyond metropolitan areas.

Sustainable and Eco-friendly Developments

Eco-conscious buyers and responsible developers are prioritizing sustainability features like solar panels, energy-efficient appliances, rainwater harvesting, and use of sustainable building materials [7]. These green features help reduce utility bills and environmental impact [7]. Developers are incorporating renewable energy sources, rainwater harvesting systems, and energy-efficient appliances to create sustainable living spaces [8].

Sustainable Initiatives

  1. Investments in sustainable and renewable energy initiatives are a priority for real estate leaders [11].
  2. The budget recognizes the need for sustainable development in the real estate industry and will provide tax credits and financial benefits to developers using sustainable materials and eco-friendly construction techniques [12].
  3. Key government initiatives include the ‘Housing for All’ program and the Green Rating for Integrated Habitat Assessment (GRIHA) to promote sustainable construction practices [2].
  4. Increased rebate on home loan interest rates and the focus on developing Tier II and III cities through the Smart Cities Mission are examples of impactful policy initiatives [2].

Market Growth and Projections

The market size and growth projections indicate a 15-20% growth in new residential launches, with over 3.8 crore houses sanctioned under the Pradhan Mantri Awas Yojana (PMAY) as of December 2023 [2].

Sustainable Trends in High-end Real Estate

Green building practices, such as the use of energy-efficient technologies and sustainable materials, are becoming a notable trend in high-end real estate development [13]. Renewable energy solutions like geothermal heating, wind turbines, and solar panels are being integrated into high-end real estate projects to reduce reliance on fossil fuels [13]. Sustainable landscaping with native plant species, drought-resistant landscaping, and water-efficient irrigation systems is another key trend in eco-friendly real estate developments [13].

Smart Home TechnologiesSustainable Transportation
Energy-efficient appliancesElectric vehicle charging stations
Automated lighting/climate control systemsBike-sharing programs
Pedestrian-friendly infrastructure

Smart home technologies, including energy-efficient appliances and automated lighting/climate control systems, are being integrated to optimize energy usage and reduce environmental impact [13]. Sustainable transportation options like electric vehicle charging stations, bike-sharing programs, and pedestrian-friendly infrastructure are being prioritized to lower greenhouse gas emissions and promote healthy, active lifestyles [13].

The government is offering tax benefits to developers of LEED-certified green buildings, incentivizing the adoption of sustainable practices [14]. However, developers, governments, and communities need to work together to overcome challenges, such as the sudden surge in essential equipment costs, and drive the adoption of sustainable real estate practices [14].

Developer Initiatives: Nila Spaces

Nila Spaces, a real estate developer, is focused on integrating sustainability into its projects through passive design, energy-efficient materials, onsite renewable energy sources, and smart technologies [15]. Nila Spaces invests in renewable carbon credits to further mitigate their carbon footprint and collaborates with experts to quantify and reduce carbon emissions [15]. Nila Spaces aims for IGBC Platinum certifications and powers its projects with Green Power to ensure a comprehensive and proactive sustainability approach [15].

Builders are using more environmentally-friendly materials and incorporating features like rainwater harvesting, solar panels, and green rooftops [10].

Smart Home Technologies

Emerging Technologies Transforming Real Estate

Artificial Intelligence (AI), Big Data, and Virtual Reality (VR) are among the most prominent technologies revolutionizing the real estate industry [11]. These cutting-edge solutions are enhancing various aspects of real estate, from property search and marketing to customer experience and operational efficiency.

  1. Virtual and Augmented Reality (AR/VR)
    • Enable immersive virtual property tours and visualization of properties before construction [16].
    • The AR/VR market in real estate is projected to reach $71.2 billion by 2028, growing at a CAGR of 23.2% [16].
    • Architects, engineers, and builders leverage AR/VR for smart building design and validation [18].
  2. Internet of Things (IoT)
    • Enables ‘smart properties’ that integrate the physical and virtual worlds, enhancing convenience and energy efficiency [16].
    • IoT-enabled devices and sensors facilitate remote monitoring, automation, and data-driven insights for property management.
  3. Artificial Intelligence (AI) and Machine Learning (ML)
    • AI and ML algorithms can personalize the customer experience by recommending properties and providing chatbot assistance [16].
    • AI is expected to grow at 8.9% CAGR in commercial real estate by 2027, streamlining tasks like predictive analytics, 3D modeling, and mortgage processing [18].
  4. Blockchain
    • Ensures secure and transparent real estate transactions and asset tokenization [16].
    • Blockchain technology enhances trust and efficiency in real estate deals.
  5. Big Data and Analytics
    • Help with property pricing, risk mitigation, marketing, and improving workflows through data-driven insights [17].
    • Companies like Zillow and Trulia leverage big data to provide trend insights and property value estimates [17].
  6. 5G and Mobile Technologies
    • 5G enables truly wireless workplaces and better connectivity for property sensors and cameras [17].
    • Mobile apps provide a convenient way for buyers to search, view, and interact with properties [17].
  7. Drones and Aerial Imaging
    • Drones capture aerial imagery and videos to aid in property marketing and risk assessment [17].
    • Aerial data enhances property visualization and analysis.

PropTech: The Future of Real Estate

PropTech (property technology) links technologies like mobile, cloud, AI, and IoT to create innovative products and services for the real estate industry [18]. The global real estate technology market is expected to reach $12.9 billion by 2025 [18]. Integrated, all-in-one platforms for real estate agents can streamline efficiency from property search to deal closing [18].

As the demand for homes with modern automation and AI-driven systems increases, including smart security, lighting, heating, air conditioning, and appliance controls [10], the real estate industry is poised to embrace these technological advancements to meet evolving consumer expectations and drive operational excellence.

Growth of Tier II and Tier III Cities

Tier 2 Cities: The New Real Estate Hotspots

Tier 2 cities are rapidly emerging as the focal points of India’s real estate market, attracting homebuyers and developers alike [3]. Between January 2022 and October 2023, a significant 44.4% of land deals (1,461 acres) took place in tier-II and tier-III cities [3]. Cities like Panchkula, Nagpur, Palghar, Khalapur, Panipat, and Ludhiana have collectively contributed around 75% of the total 1,461 acres of land acquired in these cities [3].

  1. The Rise of Tri-City Region
    • The Tri-city area (Chandigarh, Mohali, and Panchkula) has gained immense popularity as a thriving residential market [3].
    • Well-planned urban infrastructure and amenities have attracted potential homeowners and investors to this region [3].
  2. Advantages of Tier 2 Cities
    • Lower cost of living and more affordable housing compared to Tier 1 cities [20].
    • Better work-life balance and improved quality of life [20].
  3. Government Initiatives
    • The government is focusing on developing infrastructure in Tier 2 and Tier 3 cities [20].
    • Plans are underway to set up an Urban Infrastructure Development Fund to boost these cities [20].

Top Tier 2 Investment Destinations

Several Tier 2 cities have emerged as prime destinations for property investments, including:

IndoreMadhya Pradesh
NoidaUttar Pradesh
GhaziabadUttar Pradesh
LucknowUttar Pradesh
KanpurUttar Pradesh
AyodhyaUttar Pradesh
NelloreAndhra Pradesh
KurnoolAndhra Pradesh
VisakhapatnamAndhra Pradesh
AsansolWest Bengal
Bokaro Steel CityJharkhand


Driving Factors Behind the Tier 2 City Boom

  1. NRI Investments
    • Non-Resident Indians (NRIs) are increasingly investing in Tier 2 and Tier 3 cities [20].
    • The work-from-home trend and the desire to provide homes for aging parents are key motivators [20].
  2. COVID-19 Pandemic Impact
    • The pandemic has accelerated the shift towards Tier 2 cities, as buyers seek more spacious homes with better amenities [20].
  3. Luxury Villa Demand
    • Demand for luxury villas is surging in Tier II cities due to rising property prices in top 7 cities [9].
    • Increased economic activity and better amenities in Tier II cities are driving this trend [9].
    • Luxury villas in Tier II cities range from ₹1 to 2 crore, compared to ₹7.5 crore in Delhi, ₹75 crore in Mumbai, ₹6 crore in Goa, and ₹5 to 50 crore in Bengaluru [9].
  4. Developer Attraction
    • Developers are attracted to Tier II cities due to lower land values and higher profit margins compared to saturated markets [9].
  5. Improved Infrastructure and Job Opportunities
    • The focus is shifting from big cities to smaller tier-II and tier-III cities, which are becoming more attractive due to improved infrastructure, job opportunities, and more affordable housing [10].

The growth of Tier II and Tier III cities presents a promising opportunity for the real estate sector, catering to the evolving needs and preferences of homebuyers while offering developers new avenues for expansion and investment [3] [9] [10] [20].

Affordable Housing Initiatives

Budget Initiatives for Affordable Housing

The upcoming budget aims to provide a significant boost to the affordable housing segment through various initiatives and reforms [21]:

  1. Increased Cap for Affordable Housing
    • The budget includes expectations to increase the cap on affordable housing from Rs 45 lakh to Rs 65 lakh, enabling more people to avail the incentives [21].
    • The government plans to define affordable housing based on carpet area rather than just the gross amount charged, as high land costs in metro cities make the current Rs 45 lakh cap unaffordable [21].
  2. Tax Breaks and Incentives
    • The budget aims to revive and extend significant benefits like tax breaks to encourage developers to construct more affordable housing and make it accessible for buyers [21].
    • The budget proposes to reduce long-term capital gains tax on property from 20% to 10% to boost investments in the real estate sector [21].
  3. Promoting REITs and Simplifying Processes
    • The budget plans to simplify processes and enhance the attractiveness of REITs (Real Estate Investment Trusts) as an investment avenue [21].
    • Developers will be allowed to choose between paying GST at a concessional rate without input tax credit or at a higher rate with input tax credit [21].
  4. Increased Tax Rebate on Home Loans
    • The budget intends to increase the Section 24 tax rebate on home loan interest rates from Rs 2 lakh to at least Rs 5 lakh to stimulate demand in the affordable housing segment [21].
  5. Support for First-Time Homebuyers
    • The budget proposes to provide tax reforms and financial support for first-time homebuyers to enhance overall stability and growth of the real estate market [21].
  6. Land Allocation for Affordable Housing
    • The budget plans to release government lands held by entities like Indian Railways at low cost specifically for affordable housing projects [21].

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