Residential Real Estate Market Size, Share and Trends 2025 to 2034

Residential Real Estate Market Size and Forecast 2025 to 2034

The global residential real estate market size accounted for USD 10.68 Trillion in 2024 and is predicted to increase from USD 11.67 Trillion in 2025 to approximately USD 25.82 Trillion by 2034, expanding at a CAGR of 9.23% from 2025 to 2034. The market is expanding due to urban population growth, home ownership preference, sustainable housing investments, and the need for smart home technologies and integrated living spaces, aligning with modern lifestyle preferences and technological advancement.

Residential Real Estate Market Key Takeaways

• North America dominated the residential real estate market in 2024.
• Asia Pacific is anticipated to grow at the fastest CAGR during the forecast period.
• The European market is expected to witness significant growth in the foreseeable future.
• By type of property, the single-family homes segment held a dominant presence in 2024.
• By type of property, the condominium segment is expected to grow at the fastest CAGR in the upcoming years.
• By buyer demographic, the baby boomers dominated the market with the highest share in 2024.
• By buyer demographic, the millennials segment is expected to witness the fastest CAGR during the predicted timeframe.

Artificial Intelligence Improving Marketability for Technology-Inclined Buyers

Artificial Intelligence (AI) is transforming the residential real estate market by simplifying processes, boosting customer interactions, and refining decision-making. Important uses include real estate assessment, forecasting analytics, client interaction, virtual walkthroughs, smart home connectivity, and property administration. Tools powered by AI examine past sales data, predict housing requirements, and offer assistance at all times. AI further improves marketing and content development, making properties more appealing to technology-inclined buyers.

• In April 2025, RealPage, a property management software firm from Texas, initiated legal action against Berkeley, California, contesting a law that bans AI-driven rent pricing tools, underscoring increasing regulatory oversight in real estate.

Market Overview

Residential real estate relates to properties intended for personal dwelling, including single-family houses, apartments, condominiums, townhomes, and villas. It constitutes the foundation of the housing industry, catering to individuals, families, investors, and developers in search of residences. The residential real estate market refers to that part of the real estate sector that purchases, sells, leases, and develops properties intended for residential use. This market plays a crucial role in the economy, affecting financial stability, consumer trust, and the general economic well-being of a region or nation.

Residential Real Estate Market Growth Factors 

• Rapid urbanization and increasing population: Rapid urbanization and increasing population drive the demand for housing, particularly in metropolitan and urban areas. As people migrate from rural to urban areas for better opportunities, it enhances the need for residential infrastructure.
• Changing demographics and household preferences: Shifts toward nuclear families, co-living spaces, and eco-friendly housing significantly influence market trends. Additionally, millennial buyers and renters are reshaping market demands with preferences for urban living and convenience.
• Low-interest rates and infrastructure development: Lower mortgage interest rates make home loans more accessible, encouraging homeownership. Coupled with the Development of transportation, healthcare, and educational infrastructure near residential areas, enhances property values and drives market growth.
• Technological advancements: Technology enables inventive construction practices and the development of sustainable and eco-friendly housing by using digital platforms, virtual tours, and data analytics are altering how properties are marketed and sold, framing transactions as more efficient and accessible.
• Government incentives and policies: Policies such as affordable housing schemes, tax benefits, subsidies on home loans, and reduced interest rates stimulate market growth by enhancing transparency and buyer confidence.

Market Scope

Market Dynamics

Drivers

Rapid urbanization 

Rapid urbanization is fueling the residential real estate market globally. As individuals move to cities seeking improved jobs and living conditions, the need for housing in urban and suburban regions increases. This trend is especially evident in developing countries, straining the current housing infrastructure and prompting developers to launch new projects. This demand is driven by wealthy individuals and prosperous local purchasers.

• In January 2025, DLF, the top real estate developer in India, revealed its USD 4 billion project, The Dahlias, located in Gurugram, close to New Delhi. The project consists of 420 units valued at USD 8 million, and offers features such as cascading lakes and private theaters.

Restraint

Affordability barrier

The residential real estate market is experiencing a restraint in affordability caused by increasing property costs, elevated mortgage rates, and stagnant growth in incomes. This has rendered homeownership inaccessible for a significant portion of the population, especially for first-time and moderate-income purchasers. Essential elements leading to this restraint consist of increasing real estate prices, soaring building expenses, high interest rates, and a restricted availability of affordable housing. Developers have decreased the availability of affordable housing units because of diminished profit margins and regulatory hurdles.

Opportunity

Increasing requirement of smart homes and sustainable living

The residential real estate market is witnessing growth in eco-friendly and intelligent housing projects. This expansion is fueled by an emphasis on sustainable design, energy-saving structures, and LEED-accredited initiatives. Smart homes and the integration of technology are boosting the attractiveness of contemporary residential properties, especially in the high-end market. The growth of integrated townships, driven by increasing disposable incomes and urbanization, is generating new growth areas. The efforts of the government, including the Smart Cities Mission, are encouraging the creation of intelligent and eco-friendly housing developments.

• In March 2025, Palava City, a 5,000-acre smart city located in Maharashtra, stood as the top smart city in India, emphasizing sustainability, contemporary infrastructure, and community-oriented living. It includes advanced water preservation, solar energy systems, and effective waste disposal.

Type of Property Insights

The single-family homes segment held a dominant presence in 2024 because of strong demand for homeownership, the desire for personal space and privacy, and the plead of owning a property that can be customized and inherited, offering a long-term investment opportunity and a sense of legacy. Recent advancements and collaborations in the sector emphasize technological innovation, such as smart home technologies and AI-driven construction, and strategic partnerships between developers and technology companies to enhance the home-buying and living experience.

The condominium segment is expected to grow at the fastest rate in the upcoming years because of low maintenance, which offers ease of ownership, increasing urban populations, and the rise of smart living concepts, coupled with increasingly integrated technology such as smart home systems and integrated conveniences to appeal to modern homebuyers. Moreover, with the demand for remote work and flexible lifestyles, individuals are mostly focusing on having a comfortable and commodious living space, further propelling the need for single-family homes. The collaboration between government and private developers on affordable housing initiatives is being addressed by imposing government schemes like Pradhan Mantri Awas Yojana to address the growing housing demand.

Buyer Demographic Insights

The baby boomers dominated the residential real estate market with the highest share in 2024 due to their significant wealth accumulation, large population, representing a significant portion of the population, and evolving needs and preferences. They are also a prime demographic for investment properties, downsizing, and retirement living, influencing demand for certain types of home features and locations, coupled with seeking a balance of value, purchasing decisions, and reliability.

The millennials segment is expected to witness the fastest rate of growth during the predicted timeframe because of their demand for financial security and asset building, the rise of remote work and flexible lifestyles, low interest rates, and the increasing availability of tech-driven real estate platforms. Their preferences and priorities, like focus on affordable housing, technology-based transactions, and sustainable living driving the market. This is apparent in the rise of co-living spaces, shared accommodations, and rental options, as well as developers incorporating smart technologies and sustainable practices that are becoming increasingly popular in new construction and renovations.

Regional Insights

Development of New Residential Projects Supporting North American Dominance

North America dominated the residential real estate market in 2024 owing to its powerfully economic strength, high population density in urban areas, and robust construction industry. Therefore, by providing a strong and stable foundation for real estate investment, employment opportunities, and well-developed infrastructure, including transportation networks, utilities, and communication systems, along with strong construction industry support, the rapid development of new residential projects, and government support and funding, drove the market in North America. 

• In May 2023, the Future Housing Initiative of New York City launched a USD 15 million partnership with the State to construct 3,000 energy-efficient, all-electric affordable homes. The initiative aims to accelerate the creation of these homes, promoting both affordability and sustainability.

The U.S. dominates the North American market due to its large and diverse economy, favorable financing options, and a strong culture of homeownership. The U.S. market also has a well-established mortgage market with various loan options and competitive interest rates, making properties more accessible and thus benefiting from a diverse landscape offering various housing options, from suburban homes to urban apartments and major cities known for high-end properties.

Government Initiatives Drive the Asia Pacific Market

Asia Pacific is anticipated to grow at the fastest rate during the forecast period due to a combination of rapid urbanization, sustained economic growth, leading to increased disposable incomes for middle-class families. Large and rapidly growing population countries like China and India are experiencing a surge in housing demand. This is further driven by government initiatives, such as public-private partnerships and investments in infrastructure and collaborations between industry and academia, along with the utilization of technology, such as online property portals and digital platforms attract investors and stimulate growth in the market.

• In December 2024, Godrej Properties obtained rupees 6000 crore through QIP to facilitate growth and expansion strategies in the residential real estate market of India.

India plays a crucial role in the residential real estate market. This is due to rapid urbanization in India, infrastructure advancement, government support, and affordable housing programs that have boosted connectivity and the need for residential properties. Initiatives such as the Prime Minister Awas Yojana and tax incentives have made it easier to own a home. The support of the Reserve Bank's monetary policy has boosted economic growth, making home loans more accessible. Innovations in technology have simplified the home-buying experience and drawn in tech-oriented audiences. 

China is enacting policy initiatives to boost the housing market, such as reducing the minimum down payment and abolishing mortgage interest rate caps. Efforts consist of affordable rental homes and city development. Increasing population, government initiatives, and urban development are propelling a possible stabilization of the market.

Europe: A Notable Region in the Residential Real Estate Market

The European residential real estate market is expected to witness significant growth in the foreseeable future. It is characterized by its economic stability, strong infrastructure, and elevated housing demand. Large cities such as London, Paris, Berlin, and Amsterdam draw global investments and talented workers, boosting the need for housing in urban regions. Europe is at the forefront of implementing sustainable housing solutions, as numerous nations concentrate on carbon-neutral structures and energy-efficient designs. Government programs and housing assistance, including affordable housing projects and advantageous mortgage regulations, enhance the accessibility of homeownership.

Residential Real Estate Market Companies

• Keller Williams Realty 
• Brookfield Asset Management 
• CBRE Group, Inc. 
• Simon Property Group, Inc. 
• AvalonBay Communities, Inc. 
• Equity Residential 
• Greystar Real Estate Partners 
• Emaar Properties 
• Greenland Holdings 
• Frasers Property 
• Harcourts International 
• Engel and Volkers 
• Prologis, Inc. 
• American Tower Corporation 
• Welltower Inc. 
• Digital Realty Trust, Inc. 
• Public Storage 
• Realty Income Corporation 
• Goodman Group 
• Vonovia SE 

Leaders’ Announcements

• In March 2025, Onewo, the residential property management division of Vanke, intends to purchase the final 55% share in Shanghai Xiangda for 870.3 million yuan (USD 119.99 million), in line with Vanke's strategy to concentrate on lucrative projects in a tough market.

Recent Developments

• In July 2024, according to JLL, the total number of residential units introduced in the first half of 2024 hit a record peak of 159,455. This equates to around 55% of all units introduced over the course of the year 2023. The availability of new housing developments has demonstrated steady growth this year.
  In December 2019, International professional services companies JLL and Miebach Consulting introduced their global Partnership into the Indian market. Based in the United States, JLL ranks among the largest real estate brokers and consultancies globally. The firm earns USD 21 billion in revenue and has a workforce exceeding 103,000 employees.

Segments Covered in the Report

By Type of Property

• Single-family homes
• Condominiums
• Apartments
• Townhouses
• Luxury villas

By Buyer Demographics

• Baby Boomer Generation
• Millennial Generation

By Geography

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa