India’s real estate sector is projected to require nearly Rs 50 lakh crore of capital over the next 10 years as it aims to evolve into a $1 trillion market by 2030 and potentially a $5-7 trillion market by 2047, according to a latest report by ANAROCK Capital.
The report, titled ‘Powering the Next Decade: India’s Real Estate Finance Transformation Story’, highlights how India’s real estate financing ecosystem is undergoing a major structural shift from a fragmented, NBFC-led model to a more institutional, regulated, and diversified capital market driven by banks, AIFs, REITs, private credit, and government-backed initiatives.
According to the report, India’s housing finance market is already valued at over Rs 38 lakh crore and is projected to expand to nearly Rs 77 lakh crore by 2029-30, growing at a CAGR of 15%. Individual home loans continue to remain the largest component of real estate financing in the country.
“India’s real estate sector no longer faces a shortage of capital. The real challenge is whether this capital can reach beyond the top developers and major metros to fund affordable housing, smaller developers, and emerging Tier II & Tier III cities,” said Shobhit Agarwal, CEO, ANAROCK Capital.
The report pointed out that affordable housing remains the biggest funding gap in India’s property market despite rising institutional participation. India is estimated to require 25 million additional affordable homes by 2030, even as supply in the segment continues to shrink. Homes priced below Rs 40 lakh accounted for only 10% of new launches in Q1 2026 compared to 26% in 2021, while premium homes priced above Rs 1.5 crore contributed 53% of new launches.
“Affordable housing remains underfunded and requires dedicated capital structures. India’s affordable housing problem is no longer a demand issue, but a structural capital allocation and financing architecture challenge,” said Vishal Srivastava, Head - Corporate Finance, Managing Director, ANAROCK Capital.
The report also highlighted that more than 4.5 lakh stalled affordable and mid-income homes across over 1,500 projects currently require funding support of nearly Rs 55,000 crore. Government-backed SWAMIH Fund initiatives have already enabled completion of nearly 58,600 homes and are expected to support over one lakh units in total.
On the commercial real estate side, banks continue to dominate financing, accounting for nearly 56% of overall commercial real estate lending, estimated at around Rs 5.2 lakh crore. Around 80% of such lending remains concentrated in Mumbai Metropolitan Region (MMR), NCR, and Bengaluru.
The report further noted that India’s REIT market continues to remain underpenetrated despite rapid growth. The combined market capitalization of six listed REITs in India has crossed Rs 2 lakh crore, but REIT market capitalization still accounts for only 0.4% of India’s overall stock market capitalization. Currently, only 198 million square feet of India’s 520 million square feet REIT-worthy office stock has been listed.
According to ANAROCK Capital, sectors such as data centres, warehousing, industrial real estate, logistics, and GCC-led office developments are expected to emerge as the next major recipients of long-term capital. India’s data centre capacity is expected to exceed 8 GW by 2030, while GCCs and technology occupiers could drive demand for nearly 1.2 billion square feet of office space by the end of the decade.
The report concluded that despite geopolitical uncertainties and global market volatility, India’s strong domestic demand, infrastructure investments, regulatory reforms, and deepening capital markets continue to provide a robust long-term foundation for real estate growth.
