Current Trends in and future of Real Estate in India

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By Ms. Manju Yagnik – VCP Nahar Group, Sr.VP NAREDCO Maharashtra.

Despite the COVID-19 epidemic, the Indian real estate market remained resilient. However, in the first nine months of 2022, key housing markets in the nation saw a 40% increase in growth due to strong consumer demand and rising earnings. According to a survey, sales have been growing in Mumbai, Bengaluru, and the National Capital Region (NCR), with the third quarter seeing the most significant unit sales yet.

A few microtrends are supporting this revival. The needs may provide a more significant opportunity for appreciation in the coming year. Learn how India’s real estate sector is being shaped.

Despite the market’s volatility, Indian real estate is becoming a popular investment option. 

Investors are rushing to buy residential and commercial real estate, in addition to factors like increasing urbanization and a growing population driving up demand for cheap housing units in key Indian cities. Due to the attractive rental returns and potential for future price appreciation, real estate investments are surging as equities markets stagnate amid rising inflationary pressures.

Rising social infrastructure and per capita income in Tier II and III cities.

Contrary to the common belief that real estate sector growth will be focused in significant cities, investments are becoming more diverse as the Indian government continues to prioritize infrastructure development. Institutional investors are actively investing in greenfield and ready-to-use Tier II and III towns with an eye on the future, even though capital inflows into commercial and office buildings experienced a 53% surge in the first three quarters of 2022.

The already strong demand for holiday houses and ultra-luxury apartments will only grow.

The market for ultra-luxury residential real estate has been increasing, with demand frequently outpacing supply, thanks to rising household incomes and increasing the number of Indians among the world’s wealthiest people. Indian real estate developers have launched new luxury housing projects to meet the demands of this expanding segment of domestic investors due to this shift in consumer behavior. Customers are increasingly choosing projects with facilities comparable to those provided by foreign developers, even in areas like Mumbai, Delhi, Bengaluru, and Kolkata that historically have a robust pipeline of such units.

The developer community will need to focus on raising building and design standards to those provided in industrialized countries, even though the Indian real estate sector is a significant engine propelling India’s overall development. To do this, they will need to acquire money through various channels, such as real estate investment trusts (REITs), and encourage more Indians to participate actively in the real estate market in their nation. Because REITs provide proportionate ownership of income-producing real estate assets, more Indian developers will be required to create their REITs, inform investors of their potential for long-term value production, and pursue more investments using this strategy.

By doing this, the government will not only attract more foreign capital. Still, it will also be able to develop a sustainable financing model that will propel the Indian real estate market to new heights in 2023.