As we enter a new year, it is only fitting to look back at the journey India’s real estate sector took in 2023 and think about what the future holds for 2024.
resilient performance
2023 has added to the upward trend in the Indian housing market. The Reserve Bank of India’s move to keep interest rates stable has enabled homebuyers to invest in their dream homes and enabled more people to become homeowners.
The unchanged repo rate also contributed to maintaining sales momentum in the residential real estate market. This positive change is tied to the overall economic health of the country. RBI’s projected GDP growth of 7% for FY24 is not just a number. That means more disposable income in people’s hands. Today, each of us wants a home with a better standard of living. That demand coincides with a booming economy.
The residential real estate market is on a recovery trend in 2023 and will contribute significantly to India’s growth story. As such, the industry is doing well, with new property launches expected to surge by 15-25% in 2024. Sales should improve by about 10-15%, which is essential for the progress of the real estate market.
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Union budgets are important in shaping the direction of the industry. The growing demand for affordable housing is being driven by the expansion of affordable housing programs, increased PMAY allocations, and increased income tax deduction limits on mortgage interest. This gave the entire sector a much-needed boost.
Government measures don’t just affect the economics of buying a home. They also enforce the rules. Increased accountability and transparency can only be achieved with government support for the Real Estate (Regulatory Development) Act (RERA) Amendments. These changes have helped protect the industry from fraud and delays, and restored confidence in the real estate business, which has steadily increased over the past two years.
Post-COVID-19, technology has emerged as an unsung hero, providing innovative solutions to long-standing challenges. The adoption of PropTech is gaining momentum and changing the way real estate transactions are done. From AI-driven analytics for market prediction to blockchain for transparency and secure transactions, technology has become a catalyst for efficiency and trust. This was a good result for the sector.
Smart homes and sustainable living are also found to be at the forefront of consumer preferences. As environmental awareness increases, developers are incorporating green practices and green building designs into their projects. The intersection of technology and sustainability is more than just a trend, it’s a fundamental shift in the industry’s ethos.
2024: Tapestry of Opportunity
Looking ahead to 2024, the Indian real estate sector stands on the threshold of a new era marked by challenges and unprecedented opportunities.
The new year presents significant growth opportunities for developers due to widespread end-user demand across segments. In 2023, the industry witnessed a surge in sales and planned development of luxury and ultra-luxury homes, with total sales in the top market exceeding 2.3 million units. In 2024, this figure is predicted to increase to his 300,000 units. Commercial real estate is also poised for a significant recovery, with a particular focus on office space.
However, like all good stories, there are challenges. Hurdles include high land costs, crowded and unplanned infrastructure, and complex rules and regulations. However, the sector has proven innovatively resilient to meet these challenges. Infrastructure issues lead to higher costs, project delays, and lower overall productivity. By overcoming them, the industry can become stronger, more future-oriented and aligned with people’s needs.
Developers and investors recognize that the Indian residential real estate market is on a long-term growth trajectory. From 2024, the sector will grow and become stronger as it embarks on a path of transformation and redefines its potential. The sector is now steering beyond recovery towards a balanced future that makes economic sense. With government stability, interest rate consistency, job growth, and increased private investment, the industry can expect an environment conducive to sustainable and strong growth.
The road ahead is both promising and challenging. As an industry leader, we have a duty to earn the trust of our stakeholders by implementing strong governance systems and delivering quality products. The government should encourage this sector and recognize it as an industry that can have significant multiplier effects on the Indian economy.
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