CHRONICLE OF REALTY OF THE YEAR
Looking back, for India, the year 2023 was nothing short of a roller coaster ride, with global geo- political situations threatening the economic recovery of the country, internally, natural disasters of floods and mishaps such as train collision and tunnel collapse made to the front page news. Amidst the global economic uncertainties and domestic inflationary pressures, the real estate sector maintained an astute position with some segments even showing double digit growth. Home prices in the country increased 5.9% year- on-year in the third quarter of 2023, according to the Knight Frank’s Global House Price Index. The stable economic growth is the main reason behind the growth in India’s residential market, despite the challenges of higher home loan rates. The office sector has seen sustained growth in demand in 2023 despite the global sluggishness and is poised to achieve next level of growth in 2024 accord- ing to JLL. The global headwinds seem to have little impact on the Indian office market which is poised to further pick up pace in the last quarter of 2023. Not to be left behind, the ICRA predicts a 9-10% YoY growth in rental income for mall operators in FY2024 and 8-9% in FY2025, driven by healthy occu- pancy levels, trading values, and rental escalations. Strong urban consumption and higher spending by households has led to retail mall operators witnessing a strong rebound in FY2023 in terms of footfalls and trading values. The most remarkable development of years 2023 has been the shifting of spotlight to Tier II and III cities real estate markets. They have been silently without any pomp and show been attracting investments as well as end users interest from housing, commercial to retail projects. RBI’s unchanged repo rate, focus on infrastructure development and connectivity, sustainable demand for homes and uptick in NRI investments boosted the real estate fraternity confidence translating into record number of new project launces across segments. The downer for the sector were the high cost of develop- ment and lack of fiscal stimulus that dented the af- fordable and mid-income housing demand specifically. REAL ESTATE TRENDS 2023 While the list goes on for many key developments taking place in Indian real estate during the year 2023, there are some which are worth noting specifically. Rising Property Prices - A troubling combina- tion of rising home prices and rapid increases in borrowing costs has put home purchases further out of reach for more people. Sustainable Homes - The demand for environ- mentally sustainable homes has further increased among homebuyers as they are becoming more conscious of their carbon footprint. Rental Market Upturn - Residential rents soared by over 30 per cent in the top 7 cities. The leaders for rental values growth are IT/ITeS centric cities, Bengaluru, Hyderabad & Pune. Affordable housing - Affordable housing sales shrank to 20% in H1 2023 as EMIs jumped over 20% and property prices continue to climb. Growth in office leasing - India’s office market has stayed on course with net absorption of around 37-39 mn sq ft which is further expected to go up by 20-22% y-o-y to reach 45-47 mn sq ft in 2024. Quality Living - Modern professionals are seeking flexible, efficient and well – designed spaces. The year also saw an unprecedented interest in premium residences, including plotted developments and villas. Digital Home Hunting - Home sales increase in 2023 saw major home hunting and transactions shifting to digital platforms. The Proptech uptrend will continue to unravel in the times to come. Digital Real Estate Investments – SEBI’s nod to fractional ownership framework for realty assets has facilitated fractional ownership of real estate in a more organised and structured manner. Increasing Interest From NRI Homebuyers - NRI buyers showed a strong preference for luxury homes, plotted developments and vacation homes. Increase In Retail Leasing – The retail sector saw retailers keen on revamping the in-store ex- periences with cutting-edge technology, person- alized services, and space optimization in keeping with the retail real estate supply surge across the country's seven major cities.
Tags : sustainable demand NRI Homebuyers Retail Leasing Quality Living Affordable housing Sustainable Homes Rising Property Prices Digital Real Estate Investments