India’s real estate sector is poised for unprecedented growth over the next two decades, with its market size projected to reach $5.8 trillion by 2047. However, achieving this ambitious target will require significant policy reforms focused on affordable housing, rental housing, regulatory efficiency, and homebuyer protection, according to a joint report released by KPMG in India and the National Real Estate Development Council (NAREDCO).
The report was unveiled by Union Housing and Urban Affairs Minister Manohar Lal Khattar at the NAREDCO Real Estate Conclave 2026. It outlines a comprehensive roadmap for strengthening India’s housing ecosystem amid rapid urbanization and rising demand for quality housing.
According to the report, India’s urban population is expected to reach nearly 40% by 2036, while almost half of the country’s population could be living in cities by 2050. This demographic shift is expected to drive massive demand for residential, commercial, and infrastructure development. However, several structural challenges continue to limit the sector’s full potential.
One of the report’s primary recommendations is a renewed focus on affordable housing. Despite substantial progress over the past decade, affordability remains a major concern for millions of urban households. The report suggests expanding land availability for housing projects, increasing permissible Floor Area Ratio (FAR) and Floor Space Index (FSI), streamlining approvals through single-window clearance systems, and improving access to low-cost financing. Targeted tax incentives for developers and homebuyers could also help boost affordable housing supply.
Rental housing has emerged as another critical area requiring policy attention. India’s growing migrant workforce, students, working professionals, and senior citizens increasingly rely on rental accommodation, yet the sector remains largely unorganized. The report recommends developing a formal rental housing ecosystem supported by institutional investments, financing mechanisms, and regulatory reforms. It also advocates expanding affordable rental housing projects and converting vacant housing stock into productive rental assets.
The report further highlights the need to strengthen homebuyer protection by improving coordination between the Real Estate (Regulation and Development) Act (RERA) and the Insolvency and Bankruptcy Code (IBC). Overlapping provisions between the two frameworks often create uncertainty in distressed projects. Recommendations include project-wise insolvency resolution, early-warning mechanisms for troubled developments, stronger coordination between insolvency professionals and regulatory authorities, and enhanced safeguards for homebuyers during insolvency proceedings.
Since the implementation of RERA, the sector has witnessed notable progress. The report notes that approximately 1.65 lakh projects and 1.16 lakh real estate agents have been registered under the regulatory framework, while nearly 1.62 lakh consumer complaints have been resolved across states and union territories.
Industry leaders believe regulatory consistency and technology adoption will play a crucial role in the next phase of growth. The report advocates wider use of digital project-monitoring systems, faster enforcement of regulatory orders, and greater awareness of RERA provisions in Tier-II and Tier-III cities.
