2022 wrote down the story of the resilience and growth of the Indian real estate sector. The industry rose to a new high against the odds of rising construction costs, inflation, successive RBI rate hikes, and the unprecedented global economic upheaval.
Not only did the sector reclaim its lost ground last year, but it also set the direction for the future of real estate. Keeping up with the latest industry figures and trends, the Union Budget announced this month has further fuelled the growth and might be a crucial turning point for the real estate industry. The Finance Minister also announced several measures likely to positively affect the sector.
Industry reports have highlighted that India’s top 7 prime residential markets recorded the highest sales during the first half of the financial year 2022-23. The pandemic highlighted how important it is to own a home, and this growing awareness of home ownership is favourable for the sector. With people realising the long-term potential of owning a house v/s renting it, this demand will lead to sustainable growth in the segment.
The economic boost, forecasted by the budget, will ensure improved cash liquidity in the market, attracting more investors and positively benefit the real estate sector. As mentioned above, positive homebuyer sentiments were witnessed in the residential sector in 2022, fuelling housing sales and new product launches. This will further heighten in 2023. With increased earnings, potential, and a need for a better standard of living, the demand for properties will lead to substantial growth in the sector. The suited economic growth, increasing disposable income in hand, and the growing base of aspirational consumers and their lifestyle changes will also lead to the demand for premium housing in the years to come.
Meanwhile, the reforms in stamp duty and the government’s measures for favourable affordable housing schemes, and the introduction of affordable rental housing complexes will lead to significant growth in the affordable housing segment.
The return of work from office will also propel the demand for office space in 2023. The rental recovery for office spaces witnessed across cities throughout 2022 will continue this year, while simultaneously, a strong supply of investment-grade buildings by leading developers and institutional owners in core locations will increase.
The overall demand and supply dynamics are expected to remain stable in 2023. Green buildings and sustainable builds supporting the occupiers’ environmental and social goals will likely have the edge over the competition in the coming years.
And a strong domestic demand, paired with an expected sizeable capital spending on infrastructure and asset-building projects by the government, is predicted to drive the real estate ecosystem’s economic activities.
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