New Delhi: India’s seven major cities witnessed an annual 8 per cent rise in the completion of housing units last year at 4.35 lakh units as developers’ cash flows improved on better sales, according to Anarock.
Real estate consultant showed that 4,35,045 units were completed during last year, as against 4.02 lakh units in the previous year. The data pertains to the primary (first sale) residential market. In Mumbai Metropolitan Region (MMR), 1,43,500 housing units were completed last year, up 13 per cent from 1,26,720 units in the previous year. The completion of housing units in Delhi-NCR rose 32 per cent to 1,14,280 units, as against 86,300 units in 2022.
“The Indian residential sector is unlikely to forget 2023, which was nothing less than phenomenal at every level. Housing sales breached the previous peak levels of 2022 and remain robust in 2024. These sales statistics – along with RERA-related commitments – have encouraged developers to stay focused on completing existing inventory,” Anarock Chairman Anuj Puri said.
With housing demand remaining high, he said developers are prioritising project completions. “Moreover, many large developers have also taken over the task of bringing many stuck or completely stalled projects by other players to completion,” Puri said, while listing out the reasons for higher execution levels.
Among other cities, the completion of homes in Pune declined 23 per cent to 65,000 units in 2023, from 84,200 units in 2022. Bengaluru, Hyderabad, and Chennai collectively saw 87,190 units completed in 2023, as against 81,580 units in 2022. In Kolkata, 25,075 units were completed in 2023, as against 23,190 units in 2022.
Proptech firm Reloy Founder and CEO Akhil Saraf said the housing market is gradually becoming more organised after the passage of realty law RERA. Real estate developers are focusing a lot on customer relationship management (CRM) and project executions, said Saraf, whose firm helps builders in generating referral sales.
Anarock also highlighted that the completion of units was the highest since 2017. As many as 2,04,200 units were completed in 2017, 2,46,140 units in 2018, 2,98,450 units in 2019, 2,14,370 units in 2020, 2,78,650 units in 2021. Record sales of residential properties in 2023 is one of the major factors for better execution of projects. As per the data, housing sales rose 31 per cent last year to nearly 4.77 lakh units across these seven cities, despite rise in prices by an average 15 per cent, and higher mortgage rates.
The real estate market, a key driver of the country’s economy, has been undergoing rapid evolution and growth in recent years. Fueled by increasing urbanisation and rising incomes, the housing sector has become a significant contributor to India’s economic landscape. With a surge in demand for homes, major builders have made strategic adjustments to pricing, fostering expectations of a positive trajectory for house prices in the coming years.
Anticipated rebound and opportunities amidst evolving market dynamics
Looking ahead to 2024, optimism prevails as the sector is poised to rebound from the challenges encountered in 2023. Analysts anticipate a more favourable market environment, citing the presence of pent-up equity seeking housing opportunities. Whether you’re a first-time buyer or an investor eyeing property expansion, staying abreast of real estate trends is crucial for making well-informed decisions in this dynamic market.
What makes India’s real estate sector an attractive investment option?
The depth of capital in Asian markets, including India, is diversifying, with real estate emerging as a favored sector for increased allocations. India’s position as one of the fastest-growing economies globally, driven by private consumption and capital formation, makes the real estate sector an attractive investment option. Investors are exploring opportunities across various real estate segments, such as office spaces, logistics, private credit, residential properties, and data centres.
Considered a long-term and secure investment by financial experts, the future of the real estate sector appears promising. A report by Concorde outlines a robust Compound Annual Growth Rate (CAGR) of 9.2% for the real estate sector from 2023 to 2028. The year 2024 is expected to mark the next phase in the evolution of real estate, driven by factors such as continued urbanisation, growth in the rental market, and steady appreciation in property prices.
According to experts, the residential real estate market is set to remain within affordable limits, reaching a three-year high in 2024. The JLL Home Purchase Affordability Index indicates that metro cities like Mumbai, Delhi NCR, and Chennai will spearhead this surge in the real estate sector. Furthermore, the expected repo rate cut, ranging between 60-80 basis points, is anticipated to maintain home prices within an affordable range for buyers.
Expert views on sustainable growth in the residential market
For sustainable growth in the residential market, experts emphasise the importance of government prioritisation of affordable housing schemes and incentives for banks to offer lower interest rates, especially for first-time buyers. This approach could lead to organic and sustainable expansion in the residential market, ensuring a balanced and inclusive growth trajectory.
What are the home loan rate projections for 2024?
Looking specifically at the financing aspect, projections for 2024 suggest that home loan rates will likely remain stable, with no substantial impact on residential demand. Instead, the critical factors influencing residential sales in 2024 are expected to be affordability and the income outlook for potential purchasers.
In conclusion, the real estate market is poised for positive developments in 2024, driven by a combination of market dynamics, government initiatives, and investor confidence. With a focus on affordability, sustainable growth, and strategic financial measures, the sector is set to play a pivotal role in India’s economic landscape, offering opportunities for both homebuyers and investors alike.Rishabh Siroya, Founder of Siroya Corp
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