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.
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.
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.
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.
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
