Market Trends

Soaring Projections: Global Residential Real Estate Market Set for Robust Growth by 2027

NEW YORK, March 15, 2024 /PRNewswire/ – The global residential real estate market, a vital indicator of economic health and individual wealth, is poised for substantial growth over the coming years. As per a latest report, an increase of an impressive USD 514.41 billion is anticipated from 2022 to 2027, showcasing an impressive compound annual growth rate (CAGR) of 5.07%. This report not only delivers a forecast but also provides a blend of historic data, charting the market's trajectory from 2017 when the residential real estate market was valued at USD 1,657.07 billion. The market landscape is fragmented with a myriad of global and regional players.

Some of the significant names making their mark in the residential real estate sector include Al Habtoor Group LLC, Brigade Enterprises, and Christies International Real Estate, along with tech-driven Collabra Technology Inc., and well-established D. R. Horton Inc. Other noteworthy participants are India’s DLF Ltd., the German-based Engel & Volkers GmbH, and several others, creating a diverse and competitive marketplace.

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As the market grows, the competition amongst vendors intensifies, with factors like quality, price, service, brand image, distribution, and marketing becoming pivotal. In a bid to outdo one another, and as a result of the intense competition, some vendors may slash product prices, potentially affecting profit margins and, by extension, market growth during the forecast period.

A Snapshot of Prominent Vendors

Al Habtoor Group LLC provides a taste of luxury with its range of opulent houses, polo resorts, clubhouses, and residential villages. Christies International Real Estate caters to the upper crust with beachfront homes, golf estates, eco-friendly residences, and even private islands. In the smart home category, D. R. Horton Inc. carves a niche with its smart homes, luxury villas, and resort offerings. For those looking at India, DLF Ltd. offers options from super-luxury to premium estates.

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Market Segmentation Insights

Technavio's segmentation analysis offers a deeper dive into the market, breaking it down by mode of booking, which includes sales and rental/lease, and by type, which further categorizes into apartments, condominiums, landed houses, and villas. The sales segment is foreseen to contribute significantly to market growth. Factors such as the burgeoning population, urban development, and the corresponding rise in housing demand primarily fuel this growth. Real estate companies collaborate with developers to sell newly constructed buildings and units, generating commissions through marketing and sales teams. These aspects suggest that the sales segment will see robust growth over the forecast period, thanks to increasing investments in the residential sector.

Geographic Market Outlook

The global residential real estate market encompasses APAC, North America, Europe, South America, and the Middle East and Africa. The APAC region is poised to make an outstanding contribution of 55% to the growth of the global market during the forecast period, propelled by rapid urbanization and an increase in consumer spending power. Countries like India and China, with swiftly expanding residential and commercial projects, are key drivers of this regional market proliferation.

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The Housing Sector's Global Ascent

One cannot overlook the global surge in the housing sector's growth. Today's homebuyers are increasingly veering towards integrated living experiences that blend residential spaces with modern facilities such as malls, educational institutions, hospitals, and office complexes within close proximity. The township housing model exemplifies this trend, meeting the comprehensive needs of inhabitants while providing enhanced security features. Unsurprisingly, townships are witnessing a dramatic upswing in demand.

The market trend is clear—increased marketing initiatives are playing a significant role in propelling the market forward globally. Conversely, regulatory uncertainties stand as a considerable impediment to the market's growth trajectory.

Analyst's Point of View

The Residential Real Estate Market in India reflects a vibrant and shifting landscape, influenced by an array of factors spanning economic fundamentals to technological advancements. With diverse offerings ranging from affordable to luxury housing, the market caters to a wide spectrum of preferences. Substantial regulatory reforms have been introduced to enhance market transparency and boost investor confidence. Nevertheless, the industry faced disruptions due to the pandemic, deviating from its pre-pandemic growth curve. The silver lining emerged in the form of ready-to-move-in apartments, which gained popularity due to their immediacy and associated lower risks compared to under-construction properties.

Technological innovations are transforming the real estate sector, ushering in the era of home automation and modern construction methodologies that have substantially raised the quality of living. These advancements continue to draw in those seeking contemporary conveniences.

Investment in Indian real estate has diversified, particularly with the introduction of Real Estate Investment Trusts (REITs), offering investors a liquid investment avenue while facilitating rental income streams. The long-term outlook is optimistic, bolstered by positive consumer sentiment, government initiatives, and banking sector support.

In terms of demand and supply dynamics, there is a noticeable shift, especially a spike in demand for larger homes following the pandemic lockdowns. With low-interest rates and reasonably priced housing options, the homeownership rate has seen an upswing. Despite the initial setbacks, the demand for home units has shown a robust annual growth rate. However, industry players face challenges due to financial stress and escalating input costs, such as cement and steel, which could impede sustained growth.

The future of the market size appears promising, driven by rapid urbanization and recovery from the pandemic's effects. Sales strategies tailored to the needs of homebuyers, along with forward-looking market trends, are expected to shape the Indian residential real estate market's direction.

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Indian Market Overview

The Indian residential real estate market stands as a testament to the nation's economic growth. It traverses the spectrum from accessible, affordable housing—bolstered by regulatory reforms focused on increasing reach to the general populace—to luxury housing, flourishing alongside the wealth of an increasing affluent class. The market weathers regulatory amendments and leverages evolving consumer demands. These regulatory changes aim to streamline processes and bring greater transparency, thus nurturing investor confidence. India's Residential Real Estate sector mirrors the country’s economic ascent, unveiling opportunities across varied segments.

Related Market Reports and Forecasts

Not limited to just the Indian market, the residential real estate domain extends to regions such as Myanmar, where the market is expected to grow at a CAGR of 3.97% between 2022 and 2027. The expected increase of USD 181.3 million is heavily segmented by type—encompassing landed houses, villas, apartments, and condominiums—and by mode of booking, which includes sales and rental/lease options.

Similarly, the European commercial real estate market forecasts are also optimistic, expecting a CAGR of 5.55% for the same period. An anticipated growth of USD 80.59 billion, extensively covering market segmentation by end-users—offices, retail, and leisure—and by type—rental, lease, and sales—cements the positive outlook for the European market.

Tables of Content and Comprehensive Coverage

The comprehensive report from Technavio—which includes an executive summary, market landscape, sizing, historic size, five forces analysis, segmentations, customer and geographic landscape, drivers, challenges, trends, vendor landscape, and vendor analysis—provides a 360-degree view of the market.

About Technavio

Technavio, a leading research and advisory entity, is the brains behind these analyses. Their focus is on identifying emerging market trends to furnish businesses with the insights needed to spot market opportunities and refine their market positions. With a team of over 500 specialized analysts, their report collection boasts in excess of 17,000 documents, spanning across 800 technologies within 50 nations. Servicing enterprises large and small, including Fortune 500 companies, Technavio stands as a beacon of market intelligence.

For more information, contact:

Technavio Research
Jesse Maida, Media & Marketing Executive
US: +1 844 364 1100 | UK: +44 203 893 3200
Email: [email protected]
Website: www.technavio.com

SOURCE: Technavio

The aforementioned report mirrors the optimism that pervades the global real estate market. It encapsulates the intricate mechanisms that propel the real estate industry forward amidst evolving preferences, economic challenges, and technological advances. The next few years are critical as they hold the potential to cement a prospering era for residential real estate, both in India and globally.