Views of Dr Niranjan Hiranandani on  Outlook 2o23 for Indian Real Estate Industry

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New Delhi, December 27, 2022: Dr Niranjan Hiranandani, National Vice Chairman, NAREDCO projected his views by saying, “The sustained homebuying demand buoyancy may dip if interest rates cross the upper tolerance limit of 9.5%, leading to demand contractions. The confidence index of key stakeholders comprising homebuyers, investors, institutional lenders, and developers remains upbeat despite economic vagaries. NRI homebuyers to catapult currency depreciation benefit and propel in luxury housing.

Banking and Financial institutions will continue to expand their retail home loan disbursement portfolio, as NPA in housing remains lowest at 2% in India. It is observed that home buyers prepay the home loans in nearly 7 to 8 years despite long term tenure.

The funnel of new property launches will reflect an improved capex cycle to cater to growing demand from the end-users and investors’ interest. Home prices will continue to grow by another 5 to 7% in FY23 in lieu of sticky inflation, high cost of borrowings and skilled labour. Going forward, industry recommends a blend of fiscal and monetary intervention to herald the growth of the labor-intensive real estate sector.

The unfurling of inevitable recession in the global economies will have a marginal impact on housing, with postponement in logging housing sales. The volatile capital markets may lead to subdued discretionary spending, which may slow down the consumption rally, especially in an interest rate sensitive housing sector. The market share of branded players will be upscale as financial discipline precipitates in the trend of market consolidation.

The demand forecast for Grade A assets in the commercial real estate sector remains optimistic with short- term deferment due to recessionary cautiousness. The expansion and diversification plan of the commercial players remains bullish as the Indian economy is poised for 6.8% GDP growth, the fastest among the global counterparts. The attractive rental yield generating asset will continue to stay favored amongst the investor class.

Growth in emerging real estate asset classes like warehousing, industrial housing, logistics, data centers, student housing, senior citizen homes, flex spaces to gain ground in the ensuing year 2023.”

Corporate Comm India (CCI Newswire)