Anticipating a favourable economic climate throughout the remainder of 2023, there will be a significantincrease in housing demand as more individuals seek to enter the market. India’s economic growth is projected to reach 8% in 2023-24and is poised to boost housing demand, in tandem with improvements in the job market and rising disposable income levels. Despite global headwinds, the Indian economy has exhibited remarkable resilience, and the real estate industry has mirrored this trend as well.
Although the prospect of further rising interest rates is a valid concern in 2023, increasingly more potential homebuyers are opting for spacious premium real estate projects, specifically luxury gated communities and townships which can easily accommodate home offices as well as offer an abundance of greenery and open spaces. The prevalent adoption of work-from-home and hybrid working models has also resulted in a higher demand for second homes and vacation homes.
Furthermore, the government is currently undertaking significant infrastructure projects, such as highways, airports, and metros, which will add value to the sector. These positive economic signals indicate a promising outlook for the housing market in the second half of 2023.
The supply of integrated gated communities with a budget of Rs.1 crore and above has experienced remarkable expansion over the past year with no signs of slowing down. Such projects offer residents the opportunity to reside in a meticulously planned gated communities replete with state-of-the-art amenities, lush green spaces, and convenient connectivity to commercial centres. This model has emerged as a rapidly growing segment within India’s bustling cities.
The expansion of remote work opportunities has prompted a growing number of individuals to explore home ownership in tier 2 and tier 3 cities, as well as suburban areas. This pattern of reverse migration and decentralization is expected to stimulate economic activity in these regions, contributing to their overall development.
As urban areas continue to experience mounting traffic and congestion, it is anticipated that a significant number of homebuyers will seek out suburban locales in 2023. Consequently, the surge in demand for housing within these suburban areas is expected to gain more momentum and spur the creation of new growth corridors in metros.
The burgeoning real estate market in tier 2 and 3 cities is rapidly positioning them as important hubs for infrastructure development. By the end of 2023, these cities will be in close competition with metropolitan areas, offering an array of attractive residential and commercial investment prospects.
The sustained growth of the real estate industry in 2023 can be attributed to a substantial investment in infrastructure, particularly in the development of roads, metro-railways, and other amenities. Capital expenditure on infrastructure and asset-building projects has played a pivotal role in augmenting growth multipliers in the real estate ecosystem. In the face of global uncertainty, India has emerged as a favourable, resilient, and cost-effective destination for businesses looking to streamline costs and optimize investments.
Increased foreign investment in 2023 has played a pivotal role in driving the growth of the real estate market. Numerous international entitiesand NRIs have investedheavily in the sector, attracted by the potential for long-term growth. This has helped to offset the threat ofa slowdown in domestic demand and keep the market buoyant.
With the increase in urbanisation and the expansion of the middle class, there is a growing demand for affordable housing.This has resulted in an upsurge of housing demand in tier3 cities and small towns in 2023. The demand for residential properties in these areas is expected to grow at an exponential rate for the foreseeable future, presenting ample investment opportunities. Coupled with the increased accessibility of financing options, the demand for affordable housing is set to soar.
Co-living and shared housing is gaining momentum in India and will be an emergent trend in 2023. This is primarily driven by the escalating cost of living and the need for greater flexibility. This trend is expected to gain traction among young professionals and students, offering them an affordable alternative to traditional housing options. The growth of co-living and shared housing is poised to benefit both property owners and renters, as it provides a viable solution for those seeking suitable living arrangements. Additionally, the migration of IT professionals, who frequently change workplaces, has contributed to the growing demand for short-stay options, further fuelling the popularity of this trend.
The advancement of India’s urban planning initiatives is intrinsically tied to the development of sustainable and smart cities. There will be a significant emphasis placed on affordable housing, specialised industrial hubs and special economic zones in tier 2 and tier 3 cities. This shift towards decentralization will invigorate economic activity in these previously under-served regions and create more opportunities for growth.
The rise of smart cities, which prioritize sustainable infrastructure, efficient resource utilization, and technology integration, has emerged as a key trend. The emergence of smart cities has generated interest from both investors and potential homeowners, leading to a bolstering of the real estate sector’s growth.
As environmental concerns gain greater public attention in 2023, there has been a noticeable surge in the demand for sustainable and environmentally-conscious residential properties in India.Properties that prioritize natural surroundings, reduced consumption of water and energy, enhanced air quality, utilization of natural lighting, and lowered CO2 emissions have a considerable influence on overall resident welfare.This trend is expected to compel real estate developers to embrace green building practices, incorporate eco-friendly materials in their construction projects, and actively support the preservation of natural resources.
These trends will likely shape India’s real estate market in the latter half of 2023.Incentivised by ease of financing and supportive regulatory measures, homebuyers have an abundance of options to choose from. The surging consumer confidence has bolstered the market and laid the foundation for massive growth in 2023.
