According to a report released on Tuesday, home prices in India are expected to rise by 4-6% this year, with rising per capita income driving demand. 

CRISIL Ratings believes that moderate inflation, stable commodity prices, lower fiscal deficit, and a drop in global policy rates will pave the way for interest rate cuts to boost housing demand. 

“Range-bound growth in capital values and a likely moderation in interest rates in the second half of this fiscal year will ensure affordability improves after a decline in the previous two fiscal years due to a sharp increase in interest rates and capital values,” it said. 

In terms of sales, the market share of India’s 11 listed real estate developers is expected to double to 30-32 percent this year, up from 15% in the pre-pandemic fiscal year 2018-19. 

DLF Limited, Brigade Enterprise, Godrej Properties, Kolte-Patil Developers, Microtech Developers, Mahindra Lifespace Developers, Prestige Estates Projects, Puravankara, Sobha, Shriram Properties, and Sunteck Realty have a track record of delivering on time and with quality. 

According to CRISIL Ratings, “continuing premiumization,” affordability, and rising per capita income should help large, listed residential developers achieve a 10-12 percent increase in sales volume this year, up from an estimated 14% growth last year. 

“Large developers have already strengthened their credit profiles by deleveraging balance sheets through strong sales and collections over the last two years and focusing more on asset-light models, such as joint ventures and joint development,” said Pallavi Singh, associate director at CRISIL Ratings. 

Real state supply has shifted towards mid-to-high-end and luxury homes, while launches in the affordable segment are expected to remain muted. According to the report, the share of launches in the mid-to-premium and luxury segments is expected to be 55-60% in 2023-24, up from 30-35% before the pandemic.