by THO
The market size of the proptech segment in real estate is estimated to touch $600 billion by 2047 from the current $10.5 billion on account of the ongoing and projected technological revolution taking place in the field, according to a joint report by Credai and EY released at the association’s 25th foundation day.
The real estate sector is expected to cross $4.8 trillion in market size by 2047 from the $300 billion currently. It is expected to contribute over 18% to the projected $26 trillion GDP target in 2047.
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“The current market penetration for ICT/proptech-based solutions in the real estate sector is $10.5 billion which is less than 5% of the overall real estate market size,” the report said.
Currently, proptech makes up less than 5% of the $300 billion real estate sector but is expected to be around $600 billion by 2047 which will be 12-13% of the overall real estate market, the report said.
“PropTech is shifting from the traditional role as facilitators to growth drivers in the real estate sector. The integration of propTech is enhancing the operation efficiency, streamlining automation, reducing expenses and improving margins in the real estate sector,” the report said.
The report talks about how innovations like Artificial Intelligence (AI), Internet of Things (IoT), and Building Information Modelling (BIM) are revolutionizing operations, enhancing efficiency, and ensuring transparency across the real estate value chain.
Credai urges govt to redefine affordable housing
Meanwhile, the developers’ body of more than 13,000 members has also urged the government to bring about a change in the definition of affordable housing, input tax credit and making available land through zoning and streamlined land acquisition policies.
It has said that the current definition of affordable housing is based on a dual threshold, a sale value of ₹45 lakhs and a carpet area of up to 90 sqm in non-metropolitan cities/towns, or 60 sqm in metro cities, has become unviable due to rising inflation, increased costs of raw materials, and higher land prices, making the original price and size limits financially unfeasible for real estate developers. Credai has proposed redefining affordable housing to homes worth ₹90 lakh.
It has proposed that developers should be given the option to choose a GST scheme in the beginning for each project (both residential and commercial). The options would include the 1%/5% composite scheme without income tax credit, or the 12%/8% scheme (after land abatement) with ITC under the regular assessment scheme.
It has said that the government should ensure availability of land through effective zoning and streamlined land acquisition policies and advocated for the development of planned satellite towns near major urban agglomerations, which would help decongest metros.
It has suggested that the government explore the feasibility of implementing a housing finance guarantee scheme for affordable housing projects and introduce flexible FSI (floor space index) payment options.
Boman Irani, president, CREDAI said that “Indian real estate finds itself at an extremely crucial and exciting junction characterized by rapid urbanization, technological integration, pivot towards sustainable methodologies and ever-increasing homebuyer and government focus. An amalgamation of this magnitude and scale has definitely put the sector firmly as the focal point of India’s robust economy. We constantly expect to take smaller, yet significant steps of development as we march towards our collective mission of Viksit Bharat by 2047.”
“As the sector evolves to meet the needs of a rapidly urbanizing population, it is imperative to adopt forward-thinking approaches that align with India’s growth aspirations. By redefining the affordable housing parameters to reflect current economic realities and focusing on planned satellite towns near major urban centres, we can address urban congestion, ensure balanced regional growth, and make housing more accessible to India’s growing middle class,” said Manoj Gaur, chairman, Credai.
