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India's housing market to continue with high demand, growth in 2024
Source: Business Standard
India's housing market defied logic this year to register all-time high sales as home buyers snapped up deals despite a jump in asking prices and the highest interest rates in six years.
Market experts strongly believe the demand will not only sustain in 2024 but rise further, albeit at a slower pace, on high economic growth and expectations of a fall in home loan interest rate.
The real estate industry saw record sales of residential properties in terms of both volumes and value, real estate market data showed as consumers are increasingly buying into the idea of home ownership post-Covid pandemic.
The ouster of dubious developers from the real estate market thanks to greater regulatory oversight via RERA helped boost confidence among home buyers. The insolvency law too has played a role in elimination of defaulting builders.
According to real estate consultant Anarock, housing sales are estimated to rise by 30 per cent this year to a record 4.74 lakh units in primary (fresh sales) markets of top seven cities -- Delhi-NCR (National Capital Region), Mumbai Metropolitan Region (MMR), Chennai, Kolkata, Bengaluru, Hyderabad and Pune.
In value terms, the sales of residential properties are seen at a whopping Rs 4.5 lakh crore, supported by higher ticket prices.
Housing prices, which started moving up from last year after remaining stagnant for almost a decade, continued an upward trend and appreciated by an average 14 per cent this year, encouraging investors to return to the primary residential market.
Property developers and consultants are of the opinion that the industry is witnessing the "best time" and it is possibly in the first or second year of long-term up-cycle.
Sales were strong across price brackets, be it affordable, mid-income, premium and ultra-luxury homes, but what surprised everyone was the huge demand for properties starting from Rs 3-4 crore range to as high as Rs 100 crore.
Big branded developers having a good track record of executing projects reported sales of entire inventories in their project within a few days, as potential homebuyers and investors queued up to book their flats in large numbers, outstripping the supply.
DLF, the country's largest real estate firm, announced in March sales of 1,137 luxury apartments, priced Rs 7 crore and above in its housing project in Gurugram for over Rs 8,000 crore within 3 days.
DLF, Prestige Estates, Macrotech Developers and Godrej Properties all reported sales bookings between Rs 12,000 crore and Rs 15,000 crore during the last fiscal year and they expect to better their performance in 2023-24 fiscal.
The consolidation in the housing market, in terms of both supply and demand, gained further momentum towards branded and trusted developers, prompting them to aggressively expand their land bank for future development.
Among other segments of real estate, the demand for office space is estimated to remain flat this year at 37-39 million square feet across seven major cities. There were apprehensions that the leasing or absorption of office space would decline this year because of geopolitical concerns and global economic slowdown.
The flexible space segment expanded their portfolio in a big way to meet demand from corporates who have started adopting managed workspace in lieu of conventional office to save cost and also get rid of facility management.