India’s burgeoning middle class is another critical driver of housing demand, with approximately 50 million households projected to have annual incomes exceeding ₹30 lakh by 2025. This marks a notable shift in housing preferences, with mid-income and premium housing segments taking center stage. The urban homeownership rate is set to increase to 72% by 2025, up from 65% in 2020, supported by affordable financing options and a younger demographic entering the housing market. Millennials and Gen Z buyers are expected to comprise 60% of new homebuyers by 2030.

According to the National Housing Survey 2024, 30% of buyers in the ₹50-₹90 lakh range prioritize energy-efficient homes, reflecting the growing importance of sustainability in purchase decisions.

Sustainability, once considered a luxury, is now a necessity in the housing market. Green-certified buildings are expected to account for 30% of new residential projects by 2025, doubling from 15% in 2020. This trend is fueled by consumer awareness of environmental impact and government incentives for eco-friendly construction. By 2025, over ₹5,000 crore will be allocated to green financing schemes, with developers increasingly incorporating features like solar panels, rainwater harvesting, and smart waste management systems. Green-certified homes, as per the Indian Green Building Council, can reduce energy costs by 25% annually, making them a preferred choice for environmentally conscious buyers and investors aligned with global ESG norms.

Technology  is reshaping the housing market through the rapid adoption of PropTech solutions. By 2025, the PropTech sector is projected to grow to $25 billion, comprising 8% of the real estate market, up from less than 5% in 2023, according to the CREDAI-EY Report. AI-driven platforms are revolutionizing property searches, with 70% of urban homebuyers utilizing AI tools to finalize their decisions in 2024, as noted by NASSCOM. Blockchain is enhancing transparency and security in property transactions, while virtual reality is streamlining the home-buying experience, with 50% of property transactions in Tier I cities expected to leverage VR by 2025.

Global brokerage is constructive on insurance as life insurers are expected to see healthy growth. It is ‘Overweight’ on auto as the sector could continue to benefit from premiumisation towards SUVs, and recovery in 2-wheeler demand supported by electrification and a pickup in exports. It is also ‘Overweight’ on real estate on the back of decent demand visibility.