Despite obstacles brought on by rising prices, the Indian real estate market saw a bright start in 2024 with a spike in demand for residential properties.
The top six Indian cities— Delhi NCR, Mumbai, Bengaluru, Hyderabad, Chennai, and Pune— saw a 20% increase in housing sales from January to March. NoBroker says the total number of housing units sold has surpassed 1,47,000.
As a result of continuous advancements and investments in the real estate sector, the market will continue to grow, demonstrating its resilience and potential.
The Indian real estate market did not take off in 2024. Propelled by a surge in demand for residential properties despite challenges posed by rising prices. With several new project launches underway and many more in the works, this momentum will continue in the upcoming months.
In addition, homebuyers should benefit from the RBI’s recent decision to keep the repo rate at its current level.
“The average rent increase has been higher than average salary increments across cities that have prompted potential home buyers to take the plunge,” stated Amit Agarwal, CEO and co-founder of NoBroker.com, in response.
Even though rents might stabilize as more supply gradually enters the market, they will not decrease.”
This year has gotten off to a fantastic start with increased demand and a compound increase in real estate transactions. The nation’s economy is growing, and this, along with a controlled environment for economic policy, has given buyers more confidence to take the risk. “We anticipate strong sales despite the ongoing increases in real estate prices, which is a sign of the positive sentiment surrounding home buying and the determination of buyers to acquire a physical asset. The comparatively lower interest rates on house loans, which currently range from 8.30% to 11.5% annually, further support this outlook,” he continued.
Among homebuyers, a new trend that suggests a “K-type” growth trajectory is worth nothing. People who had their eye on properties between Rs 80m lakh and Rs 1 crore are now upgrading their preferences above that amount. Within gated communities, they are selecting larger unit sizes and properties. There has been a downward shift in the housing choices of those initially considering homes between Rs 60 lakh and Rs 80 lakh as they choose more affordable options. This divergence in consumer behavior highlights how different market dynamics affect various population segments, which in turn contributes to the growth patterns’ bifurcation.
We have even seen some projects get taken up within a day of their launch against an environment of rising demand, which shows how quickly things move in the market.
In addition, there has been a noticeable increase in the price of completed properties, making buyers more desperate to secure their purchases before prices continue to rise. A noticeable trend adding to this dynamic landscape is that Grade B builders are starting to command prices comparable to those of their Grade A competitors, pointing to a leveling of the playing field regarding pricing dynamics, according to Agarwal.
There will probably be ongoing pressure on property prices due to the high demand for residential real estate and the hike in input costs, leading to more upward revisions. Also, by increasing affordability, facilitating better loan terms, and creating a more favorable market climate for real estate transactions, India’s reduction in retail inflation may benefit real estate purchasers.
According to NoBroker’s annual real estate report 2023, investors continue to view real estate as a top investment option. 74% of respondents preferred it over other, riskier options like SIPs, stocks, gold, and bitcoin, which indicates how much people liked it. Bengaluru and Delhi-NCR make up half of the major cities’ combined sales. Compared to 2023, Bengaluru anticipates growing by more than 25% annually.