Year beginner – what 2023 has in store for residential real estate – segments in focus, budget expectations, demand- price ratio

2022 has been a year where buyers were focused on quality and brand value and housing sales continued their upward trend. The post-pandemic upswing in demand of residential real estate has been consistently rising. The strong fundamentals for demand are expected to continue in 2023. With focus on location and demographic, homebuyers demonstrated inclination towards functional homes, with premium amenities. Bigger homes, independent floors and plots are the main sought-after or preferred options of home buyers in the coming 2023.

Since the pandemic began, there has been a sustained increase in the demand for homeownership. Homebuyers are searching for larger, greener places with value-added services and facilities that improve their well-being as a result of trends brought on by the pandemic, such as remote and hybrid working. Homebuyers are also drawn to outlying locations that are close to urban centres as a result of this evolution in purchasing preferences. In comparison to the previous ten years, the first half of the financial year 2022–23 is likely to witness the biggest sales in India’s top 7 premier residential markets. Mumbai has particularly witnessed a stark rise in new residential launches which will continue in 2023. Redevelopment is expected to rise due to demand for larger homes and premium residencies Luxury redevelopment will be the buzzword in the island city.

As we know that the rise of the real-estate industry in India is being driven by premium and luxurious dwellings. Luxury housing stood out and took control of the favoured dwelling class in 2022.

Additionally, the pandemic made real estate appear as a more reliable option for investment, and this perception was further reinforced as a result of the sector’s year-over-year performance. The dynamics of supply and demand are anticipated to be stable in 2023. Even with the likelihood of additional increase in rates, the market is likely to react favourably, as it has in the past 12 months.

Indian policymakers and top government officials take pride in the fact that, compared to global challenges, the nation has emerged as a strong economic story and rightly so. In fact, many foreign experts have emphasised how well-positioned and appealing India is as an investment location. This is mostly because Indian real-estate prices stayed moderate throughout the past ten years while prices in western economies and China saw considerable surges.

India has experienced a significant rise in homeownership attitude following the pandemic and its demands, in stark contrast to China, and this tendency will continue. Due to the appealing rental returns and potential for future price appreciation, real estate investments from NRIs are surging as equities markets stagnate amid rising inflationary pressures.

The housing market, the driver of growth and sustained of the entire real estate economy is poised to witness an extremely impressive and potentially its best year in the near future. Residential sales are up by a whopping 51 per cent post the Covid-19 period. According to Reuters, prices are expected to rise nearly 7.5 per cent all over India (4-5 per cent in Mumbai and Delhi, 5.5-6.5 per cent in Chennai and Bengaluru) and a number of other economic indicators also favour a positive uptick.

The big picture of the entire Indian economy heading into 2023 displays what can only be translated as positive signs, an 8-9 per cent overall growth, an expected rise in the jobs created, and a bounce back from the recent slump in the stock market. All these would ultimately contribute to an increase in the demand for housing as more people would enter the housing market, which is something very important for the health of the real estate economy. Apart from speculation, we know for a fact that the government has been planning and implementing infrastructure mega-projects such as highways, new airports, metros, etc. as well as major policy initiatives such as “Housing for all” and the Pradhan Mantri Awas Yojana. This will drive growth quantitatively and qualitatively in real estate assets.

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