The interplay of shifting consumer preferences, governmental regulations, and market dynamics will result in an active real estate market in 2024.
In recent years, there has been notable growth in the Indian real estate sector. Almost all of the records from the previous year were shattered in the first quarter of 2024; the year 2023 saw the most new projects announced in a decade. According to a report, the residential real estate market anticipates a significant influx of new launches in 2024, with an estimated range of 280,000 – 290,000 units. This has paved the way for a successful 2024, demonstrating that the industry is not only expanding but also showing signs of continued expansion in the years to come.
Will 2024 see the market’s drivers?
India’s real estate industry has long been one of the main forces behind economic expansion, contributing significantly to the GDP. The industry has proven resilient and adaptable in the face of challenges in recent years, including COVID-19, regulatory changes, and liquidity crunch. A gradual recovery in the market was observed in 2023, driven by favorable government policies, pent-up demand, and a rise in the industry’s adoption of digital technology. According to former Housing and Urban Affairs Minister Hardeep Singh Puri, the Indian real estate market is projected to grow to a $1 trillion sector by 2030 and contribute roughly 15% of the country’s GDP by 2025.
The Indian real estate market is viewed as a worldwide investment opportunity in addition to meeting local demand. Particularly NRIs are actively involved in the market as a means of maintaining ties to their homeland in addition to acting as investors. About 10% of all market investments as of the 2019-2020 fiscal year were made by non-resident individuals (NRIs). By the end of 2025, this percentage is expected to have increased to 20% from its current level of 15%. This is a blatant sign of the market’s popularity across borders and the confidence the NRI community has placed in it.
The Indian real estate industry’s upward trend is evidence of its resilience rather than the product of chance. This sector has maintained a consistent increase in rental yield despite the ongoing devaluation of the Indian rupee and the difficulties presented by the state of the world economy. This has fueled the sector’s growth, providing confidence in its stability and potential for further expansion, supportive economic policies, and an emotional bond with the nation of origin.
Consumer Behavior and Market Structure
The Luxurious Living Trend
India’s growing economy has made it more desirable for those with more disposable income to live lavish lives. The populace also looks for homes with extra features like swimming pools, fitness centers, and lovely gardens. Upper-middle-class individuals also want larger living spaces with more money, besides HNIs and UHNIs.
Considering the Environment
The building of sustainable structures has seen a significant shift in the Indian real estate market during the past two years. The real estate industry is improving living standards by employing environmentally friendly building materials, water conservation and management techniques, and energy-efficient building designs. Customers are looking for houses that align with their values and views. Homes with rainwater collection systems, renewable energy systems, and energy-efficient appliances are sought after by today’s buyers, especially those belonging to Generation Y.
Naturally occurring light and air are also permitted in sustainable homes, creating an impression of greater room and fresh air. This improves moods and lowers stress levels, which boosts productivity— especially for those who work from home. Although building green real estate costs a little more than building traditional homes, people can save a significant amount of money on their bills over time, making it an excellent investment.
Housing Preferences
Due to a lack of Ready-to-move-In (RTMI) inventory and price increases in gated communities, buyers are gravitating toward individual homes, resale properties, and under-construction projects. Resale properties are in high demand because they offer a good living space without the wait or the high cost of interiors. Price should increase significantly for houses that have been completed or are under construction.
Investment Shifts
Commercial real estate has historically been favored for investment because of its higher returns and lower maintenance requirements. On the other hand, a significant increase in residential property rental yield during the past two years, combined with their affordability, has shifted the odds in their favor. There is a general expectation that residential properties will capitalize more quickly than their commercial counterparts due to the quick price rise.
Technology Use
The real estate market is rapidly changing due to technology, which makes it easier and more efficient for people to access and invest in properties. The ease with which one can now access market data, view properties through virtual tours, and buy or sell a home with a single click is revolutionizing the home-hunting experience. People can find reasonably priced homes outside their offices and reduce their commute time using metro-based filters on Proptech platforms. The convenience and effectiveness of the real estate process are being improved by the gradual transformation of Internet channels into a one-stop shop for all services related to the market.
Modern buyers want a home that easily incorporates technology to improve their quality of life, not just any old house. The demand for smart homes is changing the real estate market. Examples include automated lighting and climate control, voice-activated assistants, smart security systems, and elevators with predictive maintenance services. The use of smart home technology has made a significant impact on buyer preferences and purchase decisions by differentiating properties on the market.
In conclusion, there has been a noticeable uptick in building activity since COVID-19, which has given the real estate market a fresh impetus. Home prices in India will keep rising to provide a stable future for the middle-class population who aspires to a luxurious lifestyle. The market is ready for a recalibration and stability in real estate prices as projects see an uptick and new launches get closer to completion. 2024 is not only a promising year for homeownership, but it also presents a wealth of opportunities due to the convergence of market dynamics, government initiatives, and changing homebuyer preferences.