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Informist, Thursday, May 21, 2026

 

NEW DELHI – India's real estate sector will require nearly INR 50 trillion in capital over the next 10 years to support its growth, according to a report by ANAROCK Capital. "The question is no longer whether the demand is there--urbanisation, rising household incomes, and a generational shift toward formal housing have settled that argument. The question is whether the capital that funds this demand will be efficient, accountable, and broad-based, or whether the sector will repeat the structural failures of the 2018–19 NBFC (non-banking finance companies) cycle," Shobhit Agarwal, chief executive officer, ANAROCK Capital, said in the report titled "Powering the Next Decade: India's Real Estate Finance Transformation Story."

 

According to Agarwal, institutional capital still treats most of the domestic real estate market as unbankable. "This is no longer a capital availability problem. It is a capital architecture problem," he said.

 

The report highlighted that the affordable housing segment, which has the largest demand-supply gap, remains chronically underfunded by formal capital. According to the report, more than 450,000 affordable and middle-income units across over 1,500 projects have been stalled across India. The residential projects require capital of INR 550 billion as funding support, according to the report.

 

The housing finance loan market is expected to reach INR 77 trillion by the financial year 2029-30 (Apr-Mar) from INR 38 trillion at present, according to the report. In this, the home loan market would be the largest component. Public-sector banks account for 46% of the home loan financing market while private-sector banks' market share is 35%. Housing finance companies account for 18% of the home loans market. "Luxury housing is expanding, but affordable housing remains crucial, with 25 million units needed by 2030," the report said.

 

According to the report, affordable housing finance companies are expected to grow assets under management by 20–21% in FY27, outpacing the broader mortgage sector's projected 18–19% growth.

 

In commercial real estate, banks account for 56%, or INR 5.2 trillion, of the overall financing. Non-banking finance companies and housing finance companies contribute 22% to commercial estate financing, as per the report. Five listed real estate investment trusts have a combined market capitalisation of roughly INR 2.1 trillion, ANAROCK Capital said. 

 

"India's real estate sector no longer faces a shortage of capital," Agarwal said. "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." Amidst the West Asia crisis, real estate demand is expected to moderate for the near term, according to the report.  End

 

Reported by Astha Oriel

Edited by Rajeev Pai

 

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