The sector is expected to reach USD1 trillion market size by 2030 and will make up for 13 percent of the country’s GDP by 2025
Since the start of 2022, industry analysts reveal that India’s real estate market has been experiencing a “healthy” rise in demand and they expect the momentum to continue for the rest of the year, reported The Times of India.
At present, real estate is already the third-biggest industry to drive economic growth and 2022 is just the beginning. The local government’s premier policy think tank NITI Aayog forecasts the real estate sector to reach USD1 trillion market size by 2030 and will make up for 13 percent of the country’s GDP by 2025.
A year of recuperation for residential real estate
Yet, 2022 isn’t the first time the sector has shown signs of recuperation during these past couple of years. The growing demand for housing started in the last quarter of 2020 though this increase hit a snag due to the second wave of the pandemic.
The government’s vaccination drives, along with the introduction of low interest rates, duty waivers in some states, appealing propositions, and reasonable market prices, enabled the market to bounce back stronger in the third quarter of 2021.
In fact, a report published by JLL uncovered that, during this period, residential sales skyrocketed by 65 percent on a sequential basis.
The real estate index has also surged by 75 percent in the past year, making it the second-best performing index and surpassing the standard index Nifty50.
In 2022, the residential sector is predicted to witness growth of roughly five percent in capital value. The sales momentum is also expected to increase as potential homebuyers continue to look for bigger houses, better amenities, and reasonable offers.
Housing Development Finance Corporation (HDFC) Ltd. Chairman Deepak Parekh agreed stating that the recent rise in demand came from both first-time homebuyers and those looking to upgrade to larger homes or move to other locations, reported The Hindu.
“Home prices have stayed fairly stable, low interest rates have helped, and the real estate sector has already self-corrected and recovered from its previous down-cycle. In short, the Indian real estate market is on an upward cycle, which bodes well for us,” he added.
Sunteck Realty Ltd, the premier developer of luxury homes and Best Developer (Mumbai) at PropertyGuru Asia Property Awards (India), will be among those that will benefit from this uptick. In the past year, Mint reported that the firm has acquired 110 acres in the Mumbai Metropolitan Region to penetrate the second-home market segment.
The luxury home developer also told Money Control that they plan on investing INR25 million (USD327,140) to INR30 million in the next seven to eight years to develop a luxury township in Mumbai.
In January, Financial Express added that Sunteck Realty will also be launching seven projects with a projected revenue of INR220 million in five to eight years.
Commercial real estate to stabilise in 2022
With over 58.8 percent of the population fully vaccinated, businesses have been in full swing and employees have started going back to work, which meant that the resumption of offices will help stabilise rents this year.
JLL’s head of private wealth group in India, Vishal Ahuja, told the Business Standard, that the apprehension towards the sector in the onslaught of the outbreak has diminished as employees can now return to the office.
From October to December 2021, the office sector witnessed 11.56 million square feet net absorption, an 86 percent increase quarter-on-quarter and the highest in the past eight quarters. Net absorption rose by 26 percent year-on-year for the half-year period of July to December 2021.
In Gujarat, for instance, the commercial sector has gained traction since 2021 as the number of startups has risen rapidly, as businesses across varying sectors look to expand, and as yuppies relocate there for better career prospects.
Data from the Gujarat Real Estate Regulatory Authority (GRERA) noted that registrations for new commercial projects in the state grew by 24 percent from 2021 to 2022 as opposed to 171 from 2020 to 2021.
Knight Frank India Executive Director Balbir Singh Khalsa said: “As industries and corporates are bullish on expansion plans, the need for commercial property has gone up. This includes office space, as well as retail and showroom spaces. The only way retail growth is underlined is to expand the geographical footprint of the brand. Moreover, as metro cities expand with new town planning schemes in place, the need for residential and commercial real estate in new areas goes hand-in-hand.”
Seen any award-worthy residential, commercial, or industrial projects in India? Nominate them for the 3rd edition of the PropertyGuru Asia Property Awards (India) on or before 23 September 2022. To know more, visit AsiaPropertyAwards.com/Award/India/.
Gynen Kyra Toriano, Digital Content Manager at PropertyGuru, wrote this article. For more information, email: [email protected].
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