India’s housing and urban development sector is set for a significant transformation as rapid urbanisation, infrastructure expansion, and ongoing policy reforms converge, according to a KPMG report.
With the urban population expected to rise to around 40% by 2036 and nearly half of the country projected to live in cities by 2050, present-day decisions in housing, planning, and financing will play a crucial role in shaping India’s long-term development path toward Viksit Bharat 2047.
Visit palladian.co.za for more information.
The report states that real estate is increasingly being seen not just as a sectoral growth driver but as a structural pillar of economic expansion, employment generation, and improved urban livability.
A major focus area is affordable housing, particularly for Economically Weaker Sections (EWS) and Low-Income Groups (LIG).
The sector continues to face structural challenges such as high land prices, delays in approvals, fragmented regulations, and limited access to financing, all of which hinder project viability.
Urban Development And Housing Minister Kailash Vijayvargiya Performs Bhoomi Pujan For ₹7.5 Crore Baneshwar Lok ProjectTo address these issues, the report recommends reforms such as increasing floor area ratio (FAR) for affordable housing projects, introducing single-window clearance systems, digitising land records, and reducing development charges.
It also highlights the need to strengthen last-mile infrastructure and align urban master plans with actual growth trends.
Rental housing is also identified as a key emerging segment. Currently informal and fragmented, it suffers from low institutional participation.
The report suggests formalising it into an organised asset class through GST rationalisation, priority sector lending support, conversion of vacant housing stock, and development of co-living and targeted housing for students, workers, and senior citizens.
Further, the report stresses the importance of improving regulatory coordination between RERA and the Insolvency and Bankruptcy Code (IBC).
It recommends early stress detection mechanisms, digitised reporting systems, project-level insolvency resolution, and better coordination between regulatory bodies to protect homebuyers and ensure timely project completion.
Overall, the report concludes that India’s urban future will depend on execution-focused reforms, stronger institutions, and public-private collaboration to ensure balanced and sustainable urban growth.