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Housing prices start moving up post Covid, buoyant real estate along with construction activities create jobs, says Economic Survey

New Delhi: The Economic Survey tabled in the Parliament on Tuesday, said that housing prices have started firming up after a two years post the lull created by Covid 19. The Survey said that unsold housing stock have reduced and demand has firmed up. 

The Economic Survey further said that country’s housing market has recovered in the current financial year. This is despite the fact that home loan interest rates have moved up and also property prices witnessed an appreciation. 

The Survey also disclosed that housing loan market have also witnessed an uptick in demand.

The Survey also states that the Russia-Ukraine conflict have caused a disruption in the supply chain, which in turn resulted in price rise of building materials like steel, causing an increase in overall construction cost and housing prices.

The Survey also says that migrant workers have returned to cities to work in construction sites and the housing market has seen a significant decline in unsold inventory. 


Citing the data of brokerage firm data, the Survey said the inventory overhang fell from 42 months last year to 33 months in Q3 FY’23. It further added that the Real Estate sector has witnessed resilient growth in the current financial year and housing sales as well as the launch of new houses of Q2 FY23 crossing the pre-pandemic levels of Q2 of FY20.

The Economic Survey also said that the work-from-home model impacted the demand for office space requirements. But the pandemic has changed individual homebuyers’ sentiment in favour of owning a house. 

The Survey added that, “The hybrid work mode with the privileges of working from anywhere encouraged first-time home buyers to move away from the conventional metros, and this brought about a pent-up demand in the residential real estate markets of Tier II and III cities.” 

Certain other factor also contributed to the resurgence of the realty sector, which include – lower interest rates during the pandemic, reduction in circle rates, stamp duties reduction on sale/purchase of immovable property and the extension of the Real Estate Regulation Act (RERA).Commenting on the Survey, Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE said, “We remain optimistic about the performance of the Indian economy, and by extension of the real estate sector in 2023, on the back of sustained domestic consumption, continued structural reforms, and improved capital expenditure. The economic survey’s projection of a 6-6.8% growth for FY2023-24 is a reaffirmation of the country’s strong macro-economic fundamentals. The survey also recognised the contribution that pent-up demand made in the recovery of the Indian economy from the pandemic, which was also reflected in the boom witnessed in the housing sector. It also projected that India would remain the fastest growing economy in the world despite global headwinds but at the same time sounded a note of caution due to the ongoing monetary tightening exercise, given the entrenched inflation.”