21 May,2026 01:44 PM IST | Mumbai | mid-day online correspondent
REITs, banks and private capital reshaping India’s real estate finance story. Representational Pic
India's real estate business is heading towards one of its biggest investment cycles yet. According to ANAROCK Capital, the sector could absorb nearly Rs 50 lakh crore in capital over the next 10 years as demand rises across housing, offices, logistics parks and data centres.
The report says India's property market is no longer struggling with lack of money. Instead, the bigger challenge is where this money is going, with most investments flowing into premium housing and top metro cities, while affordable housing continues to face a major funding crunch, said CEO Shobhit Agarwal.
India's real estate market is expected to become a USD 1 trillion industry by 2030. This growth is attracting banks, REITs, private equity funds, AIFs and institutional investors in large numbers.
According to ANAROCK Capital, the sector's financing landscape has changed sharply over the last decade due to reforms such as RERA, GST and stricter RBI regulations, making the market more transparent and investor-friendly.
According to the report, India's real estate sector has moved from a fragmented and NBFC-led funding model to a more regulated and transparent system. Structural reforms such as RERA, GST, Insolvency and Bankruptcy Code (IBC), REIT regulations and RBI norms have improved investor confidence and capital flow into the sector.
ANAROCK Capital CEO said the challenge today is not the availability of capital, but ensuring that funds reach affordable housing projects, smaller developers and emerging Tier-II and Tier-III cities.
While luxury and premium homes continue to attract strong investor interest, affordable housing is being left behind.
The report highlights that homes priced below Rs 40 lakh now make up only 10 per cent of new launches, compared to 26 per cent in 2021. At the same time, premium homes priced above Rs 1.5 crore account for more than half of all new launches.
"There is an urban housing shortage of roughly 10 million units, and at least 25 million affordable homes are needed by 2030," said Vishal Srivastava, Head - Corporate Finance, Managing Director.
One of the biggest concerns remains stalled housing projects. More than 4.5 lakh affordable and mid-income homes across 1,500 projects are currently stuck and need around Rs 55,000 crore in funding support.
The government-backed SWAMIH Fund has already helped complete nearly 58,600 homes. The newly announced SWAMIH Fund 2.0 is expected to support another one lakh homes.
India's housing finance market has already crossed Rs 38 lakh crore and is projected to double to Rs 77 lakh crore by 2029-30. Home loans continue to drive the sector, making housing finance one of the largest business opportunities for banks and finance companies.
Commercial real estate funding remains heavily concentrated in Mumbai Metropolitan Region (MMR), NCR and Bengaluru, which account for nearly 80 per cent of total lending in the sector.
Banks currently dominate commercial real estate lending with a share of 56 per cent, while NBFCs and Housing Finance Companies contribute around 22 per cent.
India's REIT market has expanded rapidly, with six listed REITs now having a combined market value of more than Rs 2 lakh crore. However, only a small portion of India's office assets are currently listed under REITs, showing massive untapped potential compared to global markets.
The next big opportunity in Indian real estate may come from sectors beyond traditional housing.
The report says investors are increasingly betting on data centres, warehousing, logistics parks and office spaces driven by Global Capability Centres (GCCs). India's data centre capacity is expected to cross 8 GW by 2030, while warehousing stock has already grown beyond 605 million square feet.
Despite global tensions and market volatility, India's strong domestic demand, infrastructure spending and urban growth continue to attract long-term real estate investment.
The report says developers with lower debt and stronger balance sheets are likely to benefit the most from the next growth cycle.
