Indian real estate growth has been robust in 2023. The increased demand for premium properties was evident due to evolving homebuyers’ needs and changing economic patterns. As the year moves toward the end, it would be practical to review the remarkable resilience of the Indian real estate sector throughout the year. It has contributed about 7.3% to the nation’s GDP, a key factor in making the Indian economy the fastest-growing economy worldwide in 2023. Despite several global headwinds, the market remains stable due to resilient and favourable aspects of the Indian economy. Macroeconomic fundamentals coupled with GDP growth have played a vital role in stimulating real estate growth. The national economy has been in a good spot despite the global discrepancies since the initial quarter of 2023, which was a huge impetus for the sector to embrace new possibilities. Quarterly housing sales reached an all-time high in Q1, with a 14% yearly rise against Q1 of 2022.
Luxury housing was the highlighting aspect that changed the dynamics of traditional homebuying. The demand for premium properties with the best facilities was evident in the top 7 markets of India. The housing sales increased by 36% in Q3, and the supply of new inventories increased by 24%, as stated in the Anarock Report. The highest sales were in the Mumbai Metropolitan Region, followed by Pune, which was remarkably higher than the corresponding tenure in 2022. The mid-segment kept dominating new supply. However, there has also been an uptick in the demand for premium segments across top markets. The rise in disposable income and a need for an upgraded lifestyle paved the way for premium inventories. Developers are also embracing the evolving trends to sustain in the highly competitive housing market. Luxury homes witnessed noteworthy price appreciation owing to their robust demand and exclusivity.
There has been a shift in homebuyers’ preferences since Q3. There has been a greater emphasis on optimal spaces, smart systems, sustainable features, connectedness, and affordability. Homebuyers now perceive their premium homes as an efficient and elevated living space rather than an epitome of class and opulence. Developers are earnestly adapting to the evolving aspirations and meeting their demands with creative and redefined solutions. The surging demand for mid-segments and premium segments can be attributed to homebuyers’ willingness to invest more in an upgraded lifestyle. Key micro-markets of Mumbai and Pune remained the preferred choice of modern homebuyers, followed by Hyderabad, Bengaluru, etc. The affordable luxury segment is paving its way in the market with renowned developers offering premium options, although at comparatively affordable prices.
One of the most significant transformations in the real estate sector is the tech-driven processes. Integration of updated technologies has become an integral part of the residential sector. Millennials are currently driving the housing market in India. They are highly tech-savvy and insightful about emerging trends. Incorporating Proptech solutions such as render visualizations, virtual property tours, AI-based market analysis, chatbots, etc., can enhance overall operations and facilitate transparency. Developers are gearing up to embrace Proptech transformations while upskilling their teams for optimal utilisation of these solutions.
Following the resilient and high-adaptable year, the Indian real estate sector is expected to remain optimistic in 2024. The supportive Government policies and stable repo rate by the RBI have incentivized growth and created a conducive environment for the housing sector. End-users will continue to drive the growth of the housing market in the coming year. Because people are more inclined to residential property investments as fixed assets. The housing momentum will remain up, as it gives a sense of security with a physical asset.
