Affordable Housing and Regulatory Reforms Critical to India’s $5.8 Trillion Realty Goal: Report
New Delhi, June 20: India must renew its focus on affordable housing, rental housing reforms, and stronger homebuyer protections if its real estate sector is to reach an estimated market value of USD 5.8 trillion by 2047. This was the central finding of a joint report released today by KPMG in India and the National Real Estate Development Council (NAREDCO).
The report, titled “Advancing India’s Housing and Urban Development Agenda”, was officially unveiled by Union Housing and Urban Affairs Minister Manohar Lal Khattar at the NAREDCO Real Estate Conclave 2026. Framing housing as a crucial pillar of the government’s ‘Viksit Bharat 2047’ vision, the study outlines four urgent policy priorities: boosting affordable housing, modernizing rental housing, enhancing homebuyer protection under the RERA-Insolvency and Bankruptcy Code (IBC) framework, and strengthening the overall implementation of the Real Estate Regulatory Authority (RERA).
According to the findings, India’s rapid urbanization is projected to hit 40 percent by 2036, with nearly half of the country’s population living in cities by 2050. This demographic shift is expected to trigger a massive surge in housing and infrastructure demand. However, the report warns that the sector faces steep bottlenecks, including limited land availability, restrictive Floor Area Ratio (FAR) and Floor Space Index (FSI) norms, lengthy approval processes, and costly financing for affordable housing. Low rental yields and regulatory overlaps between RERA and IBC add to the challenges.
To increase the supply of affordable housing for Economically Weaker Sections (EWS) and Low-Income Groups (LIG), the report recommends expanding land availability, raising permissible FAR, and streamlining approvals through single-window clearance systems. It also advocates for improving developers’ access to low-cost finance and providing targeted tax incentives.
Addressing the rising demand for rental housing will require creating a formalized ecosystem backed by institutional investment, regulatory support, and innovative financing. The report suggests expanding Affordable Rental Housing (ARH) models, converting vacant properties into rental stock, rationalizing the Goods and Services Tax (GST), and setting up dedicated rental frameworks tailored for students, migrant workers, working women, and senior citizens.
A key highlight of the study is the call for a closer alignment between RERA and the IBC to protect homebuyers stuck in stressed projects. It proposes project-wise insolvency resolutions, early-warning monitoring systems, tighter coordination between RERA authorities and insolvency professionals, and enhanced safety safeguards during active insolvency proceedings. The report noted that since RERA’s inception, 1.65 lakh projects and 1.16 lakh agents have been registered, with 1.62 lakh complaints successfully resolved across states and union territories.
Commenting on the sector’s trajectory, Parveen Jain, National President of NAREDCO, said the real estate sector would be central to India’s development and called for stronger collaboration among government, industry and financial institutions to accelerate housing and infrastructure delivery.
Neeraj Bansal, Partner and Head – India Global, KPMG in India, added that enhanced RERA-IBC alignment and technology-driven monitoring systems could foster transparency, accountability and project execution. Further, raising the default threshold for initiating IBC proceedings to Rs 5 crore could support efficient project progress.
