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Real estate expected to remain buoyant in 2023; demand, prices to continue moving northward, say industry bigwigs 

Real estate in India has been buoyant since Covid-19 pandemic and it is expected that the growth momentum will continue in 2023 also, at least in the first quarter of the calendar year, say experts.
Experts differ in their opinion on the duration of the momentum in the sector. While some say that the buoyancy will continue throughout 2023, others take a cautious approach opining that global economic developments will also have a say in deciding the course of real estate movement during the year.

In December 2022, the Reserve Bank of India raised repo rates for the consecutive fifth time in seven months. As a result, the banks started passing on the hiked interest rates to the consumers, which in turn, is increasing the cost of buying home. 

Following are the experts’ excerpts on their outlook for real estate sector in India for the year 2023 – 

Manoj Gaur President  CREDAI NCR and CMD Gaurs Group

The year 2022 has been one of the best years for the real estate sector. After pandemic, people have realised the importance home ownership and demand for bigger homes has increased.  The home preference are 3 and 4 BHKs  and we have seen increase in the demand for plotted development too. This year price has been increased from 25 to 30%. We believe that this will continue in 2023 also as stock for unsold inventory is at its lowest corner and the demand is increasing simultaneously. The impact of the rising home loan interest is marginal as of now because the customers preference to have their own piece of real estate and the peoples are also going for second & third house and they want to hold the real estate for the long time because we have seen in past that the wealth creation is always been done by investment in the real estate sector only. 2023 will be a great year for the real estate.

Amit Jain, Director, Mahagun Group

It proved to be a fairly good year for the realty sector as the normalising conditions opened space for markets to perform and buyers to make investments in their choice of homes. The luxury markets prospered on the back of the strong demands of High-Net-worth individuals and the advent of NRIs in the real estate space. The growing share of the real estate sector in the national GDP outperformed everyone’s expectations and doubts regarding its revival tapered off. It was a critical year for the realty sector as it would reflect whether people would be interested in investing in homes right after weathering a pandemic. It showed positive signs of growth right from the year’s beginning and continues to stay strong.

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Yash Miglani, MD, Migsun Group

The real estate sector enjoyed a good run this year both in demand and sales. Realising the high appreciative value of home ownership, buyers returned to the markets and invested in properties of various categories. The sales reported in a few categories even overpowered the sales of the pre-pandemic years. This shows the market resilience of the real estate sector and buoyant customers’ demands. Even the rise in home prices did not prove to be a deterrent, and people heavily invested in properties located in high-end residential corridors. The festive season also marked a solid uptick in home investments in 2022.

Amit Modi, President, CREDAI, Western UP and Director, County Group

2022 was a year of overriding expectations for the economy to begin returning to normalcy after more than years of lockdown. Likewise, the realty sector edged towards regaining its pace, and there was a revival of growth in the property markets. However, it was not a smooth run, with many economic headwinds like an inflationary onslaught, constant hikes in repo rates, and a stark increase in construction material costs posing significant hurdles to the acquired revival speed. Despite that, real estate investment emerged as a stable and resourceful asset, which led to buyers’ empowerment in times of crisis. This perception kept the housing demand buoyant, and as people started attaining financial bandwidth and emerged out of pandemic ramifications, they preferred to invest in homes. The homeownership process became more smooth and more buyer-friendly with the greater integration of technological advancements in the real estate space.

Amit Jain, Director, Mahagun Group

The buyers’ appetite is immense, with real estate absorption of luxury and commercial projects witnessing an enormous upsurge in demand. The realty demand continued to be pretty stable even in the midst of repo rate hikes and increases in construction material costs, which has catapulted a drastic rise in the selling prices of projects. The festive season also indicated a scalable increase in property demand on the back of fruitful offers. In a few housing segments, the sales figures exceeded the pre-pandemic years, especially luxury housing.

Kushagr Ansal, Director Ansal Housing

The findings of the report augur good outcomes for the realty sector, especially the premium segment. Largely unaffected by the interest rate hikes, modern luxury homes have become buyers’ favourite investment territory. The price rise did not have a collateral impact on the housing demand, which continues to be buoyant. Coming on the heels of a year-ending, it posits healthy market conditions for the realty sector, which will most definitely be carried forward in 2023.”

Dhruv Agarwala, Group CEO, Housing.comProptiger.com and Makaan.com:“The Indian real estate sector bounced back strongly in 2022, with the resumption of economic activities in full swing, post the COVID-19 pandemic. All segments of real estate – housing, office, retail, warehousing, data centers, co-working, and co-living, performed well. Housing sales too, are all set to breach the pre-COVID levels and may achieve an all-time high. The pent-up demand of the last two years and the strong need to own residential properties in the wake of the pandemic were the two major demand drivers behind this strong revival. 

In a nutshell, it was a good year for the entire real estate sector after a long gap, looking past the disruptions in the last 5-6 years caused by demonetisation, the introduction of RERA & GST, the NBFC crisis and of course, the COVID-19 pandemic. We strongly believe that the real estate sector will continue on a growth trajectory in 2023 as well.”

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Pradeep Aggarwal, Founder & Chairman, Signature Global
Real estate, especially the residential segment, has bounced back in the last couple of years and is playing a significant role in bringing momentum to the economy.
Compared to the start of the year 2022, interest rates on home loans are now more than 2% up. We believe that it may have an adverse impact on housing demand in 2023.

To sustain the demand, which is also essential to support the economy, the government should announce home buyers friendly tax sops in the upcoming budget. Respective state governments should also think of waivers in stamp duty and registration fees, as announced earlier by few states, to keep the demand movement going.

Ankur Gupta, JMD, Ashiana Housing Ltd., 

In the coming years, it’s anticipated that the economy will expand, pre-pandemic working conditions will return, and a number of other factors will probably influence the housing market. While developers provided incentives and discounts to homebuyers, state governments stepped in by new policies supporting the same.  As a result, we have every reason to believe that the real estate market will continue to perform strongly and profitably in the upcoming year.

The forthcoming Budget will likely include several economic measures that the real estate industry has begun to anticipate. The sector, which creates the second-largest number of jobs after agriculture and accounts for around 6% of India’s GDP, seeks government backing to maintain the rebound (GDP). The real estate sector’s top budget priorities should include expanding tax benefits for homebuyers and changing the definition of affordable housing.

The sector desires rationalisation. The Rs 2 lakh tax rebate on housing loan interest under Section 24 of the Income Tax Act needs to be hiked to at least Rs 5 lakh. This will add momentum to housing demand, particularly in the affordable segment.

Nayan Raheja, Raheja Developers

A Strong demand  for homes across segments has augmented the realty sector growth post-pandemic. While the luxury category has seen visible foreign and NRI interests, plots have also witnessed great traction with growing price appreciation. Farmhouses remain a rich-class indulgence, while independent floors are becoming a preferable investment category for home buyers who prioritize personal space and privacy. The realty sector projects a positive growth and looks towards another year filled with rising customer engagement.”

Ankit Kansal, Founder & MD, 360 Realtors

2023 will be one of the most promising years for Indian real estate in recent times. After a prolonged period, we are witnessing demand outstripping supply, which will make it a seller’s market. Property prices will continue to grow, which in conjunction with recent growth in interest rates will drive first-time homebuyers to make quick decisions. Households who already have homes might think of opting for a second home or retirement villa. Besides the organic surge in demand, India’s bullish economy will also bolster the sector toward an accelerated growth trajectory. India will remain one of the bright spots in the global economy with most of the rating agencies projecting growth in the range of 7-9% in the next fiscal. This will consequently drive both housing and office demand. India already is registering a jump in disposable income and expansion in the labor market, which are very positive signs for realty demand. Investors will also gravitate toward the market, lured by growth in appreciation and rental income.”

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Ashwani Kumar, Pyramid Infratech

Every facet of real estate prices has increased in 2022, including raw material costs, Repo rate increases, project prices overall, etc. All of these elements temporarily halted project sales. However, since more and more buyers expressed a strong desire to possess their private spaces in the most prominent areas of their individual regions, the market remained healthy. As more members of society’s economic class register for their dream homes, residential developments, particularly those in the inexpensive segment, have seen a huge increase in sales. As more and more developments near completion, demand for apartments has remained steady and is anticipated to continue in the days ahead.

Harpal Singh Chawla, Director, Spaze⁩ Group

Different real estate corridors have clearly increased prices. This is the immediate result of repo rate increases, which inevitably cause a rise in property prices. Despite regional and global economic pressures, there has been a strong demand for real estate projects, especially the commercial segment, including SCOs and mixed-use projects, as more people become aware of the long-term appreciated advantages of real estate investments. The most significant price growth has been seen in Gurugram, which reflects both the appeal of the corridor and the speed with which buyers have acquired properties. Additionally, there has been a noticeable surge in pricing models in areas near the Dwarka Expressway. It consistently demonstrates a rise in property demand as well as how Gurugram has become a well-liked area for homebuyers to settle down.

Ritu Ahlawat, CEO, InvestinPRO

The real estate sector projected a smooth recovery from the pandemic effects this year. However, the pace of recovery was affected by high-interest rates, global recessionary pressures, and supply chain fluctuations caused due Ukraine-Russia; the healthy buyers’ demands proved to be a facilitator in bringing the realty sector back on track. The sales augmentation post-normalcy marks an example of its market hold and resilience. The recovery could have been fast-paced if the unforeseen economic and political implications had not occurred, but the performance of the realty sector was impressive in the face of the market realities.

Kishan Govindaraju, Director, Vaishnavi Group

“2022 has been an interesting year for the Indian real estate sector wherein it reinforced its stance as one of the most robust industries across the world having faced the COVID-19 induced pandemic and still registering a significant growth. While commercial real estate saw almost double the growth in leasing due to pent up demand, residential witnessed 40% growth in the nine months of this year, indicating the sector’s strong fundamentals.

While we expect the robust demand to continue in the coming year though we will have to be on a wait and watch mode to understand the impact of rising interest rates and the recession fears. Having said that, the Indian real estate sector is witnessing an interesting proposition where property prices have not risen as per the inflation over the last decade though rentals have witnessed steady growth, making it an attractive proposition for investors.”

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Angad Bedi, Managing Director, BCD Group

With the continuous depreciation of the rupee it is a great opportunity for NRIs and foreigners to invest in 2023. Apart from being a safe haven in these uncertain times, Indian real estate also offers capital value appreciation and rental income. The rising interest from NRI homebuyers is being witnessed across segments, from mid income projects to premium and luxury housing. The price entry points offered by us are unparalleled and unlikely to happen in the future. No time like now to own a home in India and BCD Group has always believed in delivering value based assets. 

Aditya Verma, CEO & Founder, The Office Pass (TOP)

As we move into 2023, the industry continues to experience good demand for both Coworking & Managed office spaces. The long-term outlook for the flexible workspace industry is extremely positive. The industry is likely to grow by 25-35% in 2023 and the years to follow. Main drivers for the industry are growing demand for managed offices from corporates, shift from centralized to distributed offices, work near home Vs work from home & finally affordable pricing. Coworking segment will account for 20% of all commercial real estate absorption in 2023.

Shesh Rao Paplikar, CEO & Co-Founder, BHIVE Group

The flexible workspace revolution has begun, and 2023 will prove to be a game-changer for the commercial real estate sector. With the industry expected to grow further in the coming year, the sector poses an immense potential for growth. Key trends expected to drive the sector growth include evolving business models, increasing investor activity and deeper geographical expansion with increased efficiency across existing markets. Tailor-made solutions will be at the heart of coworking spaces, with an increasing need for customization across SMEs and multinationals.

Bhavesh Kothari, Founder & CEO, Property First

We expect home purchase synergies to remain largely intact for the time being with banks likely to delay passing on further significant hikes to consumers in the immediate term. The residential sector seems to be gained momentum in 2022 and is likely to continue if not hit by global financial crisis. High end and luxury segments that saw strong growth since last year, will continue to remain largely insulated as demand for spacious houses with more green and open spaces are likely to increase.

Rishi Raj, COO, Max Estates Ltd

With several new milestones and announcements, 2022 has been an exhilarating year for Max Estates. The real estate industry as a whole has witnessed a visible shift in preference from just ‘location, location and location’ to now ‘location, product and experience’ as the three key success metrics for real estate developments.

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Gagan Randev, Executive Director, India Sotheby’s International Realty

The outlook for Office remains strong in 2023. We expect a very strong rebound in Grade A spaces and the vacancy rates in these office parks should continue to reduce while Grade B spaces would find it more challenging. 

Retail again seems to be set for its strong performance and rentals will continue to show their upward trajectory. India is expected to see 16 new malls opening in Tier 1 and 2 cities in 2023 and a similar number in 2024 and it is a clear expectation of participants that E-Commerce and Physical shopping will co-exist. 

Warehousing will continue its strong investment and growth momentum. The entry of new Global players like Prologis and Panattoni will make sure that all the players are exploring land and development opportunities, with even more vigour, in the 20 top cities which seem to be the preferred locations for Warehousing. 2023 should also see a strong push into In City warehouses – very high build quality structures with more floors than traditional warehouses, latest technology  all achieved in buildings on plots of 3-5 acres. These would be taken up at market rentals (often just below commercial rates) and would be the new growth vista.

Saransh Trehan, Managing Director, Trehan Group
We expect that housing demand, driven majorly by end-users, will continue in the year 2023, despite setbacks in the form of increasing home loan interest rates.  
The overall industry will see a lot more confidence from the buyers and investors. Affordable housing segments, independent floors and plots will continue to attract home buyers even in 2023. However, property prices are likely to move upward because of an increase in construction cost and higher demand.

Ashwinder R. Singh CEO, Residential Bhartiya Urban

“This year was a litmus test for the realty sector as restoration of economic activity took place in a phased manner which could also possibly mean revival of real estate fortunes. On the brighter side, the realty sector plunged out of the pandemic deadlock and property markets rekindled on the back of strong buyers’ demand. The residential sales grew, and commercial leasing activity picked up. Luxury housing held the lion’s share in the markets, and the phenomenon of rental housing saw an uptick.The rental yield which has grown at a healthy rate and now hover between 3-5% in metros also make residential asset a great investment product offering both return and stability, which is attracting investors’ interest like never before. Despite inflationary challenges and interest rates getting dearer, the realty sector recovered its pace and never lost its hold, irrespective of economic travails. 2023 will be another crucial year in real estate’s progression towards creating an impactful mark in the post-pandemic world. “

Ansh Batra, Director, Buniyad Group

Considering the momentum gathered by the realty sector in 2022, 2023 will be a favourable year. Realty, in its entirety, has projected a smooth-paced recovery despite tumultuous international and domestic implications. The segment which had the most impressive run is luxury real estate. There were a few concerns which also troubled the sector, such as the consistent repo rate hikes and rapid increases in home prices. However, the demand remained stable, and the growth drive picked up, spelt out in the decrease in unsold inventories. Overall, the steady realisation of the sustainable value of home ownership drove housing sales. Positive sentiments for real estate investments will continue in 2023.

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