Low home loan rates and steadily increasing homeownership sentiment helped maintain gains and momentum in residential real estate.

The real estate sector was witness to a multitude of developments, such as decline in affordable housing, launches in mid-range and premium housing, surge in rental demand, and a construction ban to control pollution after Diwali. 

Here are some of the major trends in India’s housing market.

Average Annual Prices Of Real Estate Rise In Mumbai, Bengaluru & New Delhi: Report

Real estate consultant Knight Frank said that the average annual residential prices across 45 global cities rose 7.5% year-over-year (YoY) in the third quarter (Q3) of 2022.

The average annual prices of real estate in Mumbai, Bengaluru, and New Delhi jumped in the third quarter (Q3) of 2022, property consultant Knight Frank said in a report.

The “Prime Global Cities Index Q3 2022” report said Mumbai moved up from 39th to 22nd position in Q3 2022. Bengaluru and New Delhi too witnessed an upward movement, rising from 41st and 38th rank, respectively, in Q3 2021 to 27th and 36th position in Q3 2022.

The report said the average price in Mumbai rose 4.8 percent year-on-year (YoY), Bengaluru 3.3 percent YoY, and New Delhi 1.2 percent YoY.

How India’s Post-Pandemic Real Estate Market Offers NRI Homebuyers ‘Distinct Advantage’

Aided by the strengthening US dollar, more and more non-resident Indians (NRIs) are looking at the current favorable real estate market conditions in India for investment, say experts.

The recent trend of non-resident Indians (NRIs) rushing to buy homes in India could be likened to the plot in the Hindi movie “Dilwale Dulhania Le Jayenge”, where one of the protagonists asks her partner to come back home from a foreign land, epitomised by the song “Ghar aaja pardesi tera des bulaye re”. 

A report by real estate firm Anarock found that 71 percent of NRIs consider investment in the Indian housing market as the best bet, markedly higher than 55 percent in a pre-Covid edition of the survey. 

So, why is it the best time to invest in India’s real estate market?

How India’s Post-Pandemic Real Estate Market Offers NRI Homebuyers ‘Distinct Advantage’ In contrast, affordable housing had a lean time, with more buyers in this segment going into wait-and-watch mode; unsurprisingly, new supply in this category has shown a significant reduction. 

According to Anarock data, in the pre-Covid year of 2019, affordable housing had the highest supply share at 40 percent, with 236,560 units launched in the top 7 cities. In the first nine months of 2022, the affordable housing supply was limited to just 21 percent of the approx. 265,000 lakh units were launched in the top 7 cities during this period.

Land – The Plot Thickens

Plotted developments were popular in 2022, especially in south India. Though the worst of the pandemic, which saw increased demand for independent living, is over, plots are still ruling the roost in terms of residential housing in Bengaluru, Chennai, and Hyderabad.

“Bigger homes, independent floors and plots were the main sought-after or preferred option of home buyers during 2022,”

Many homebuyers were left wondering about the fate of their under-construction buildings, as the government banned construction activities in the National Capital Region (NCR) last week after the air quality index (AQI) dipped into the “severe” category, potentially disrupting the real-estate market.

On October 28, 2022, the government banned all construction activities in Delhi NCR under the stage III Graded Response Action Plan (GRAP) following rising pollution levels in the region.

 Rental Demand Surge

With more companies calling their employees back to the office, at the very least in the hybrid model, rental demand rose again after softening considerably during the worst of the pandemic. 

Rental market demand not only breached pre-pandemic levels, but also surpassed them, and many housing societies reported having few to no vacancies. 

Rentals rose 20-25 per cent against pre-pandemic levels on average, with some of the more popular societies seeing more than a 30 per cent increase.

FAQ :

Will property prices fall in 2023 India?

Sales in the July-September 2022 period are 20% higher than those reported in the corresponding period in 2019, fuelling expectations of double-digit growth numbers in 2023 as well.

What are the current trends in the property market?

The positive housing market trends in 2021 have continued into this year, as housing market trends in 2022 also show large growth. Higher demand for rental properties has seen an increase in rental prices, as well as housing prices in general.

What are the 4 factors that affect housing?

The housing market is influenced by the state of the economy, interest rates, real income and changes in the size of the population.

Conclusion :

For India’s real estate market, 2022 was a year of a new high. Both home sales and new launches improved significantly, and this strong momentum will most likely last through 2023, with sales doing even better than in 2022, which were higher than in 2014.

The Indian real estate market, which is tried and tested and widely thought to be immune to market volatility, has stayed true to investor expectations despite many ups and downs over the past couple of years. Positive expectations and rising momentum have demonstrated its ability to persist, and it will do so in the upcoming year.

Real estate in India has something for every type of investor, except for those who may be gamblers. Looking ahead to 2023, the general Indian economy shows what can only be interpreted as encouraging indicators, including a predicted increase in job creation of 8–9%, a rebound from the current stock market fall, and an 8–9% overall growth. All of these would ultimately lead to a rise in housing demand as more individuals enter the housing market, which is crucial for the health of the real estate sector.

In addition to policy programmes like “Housing for all” and the Pradhan Mantri Awas Yojana, the government has been planning and implementing mega infra projects like highways, new airports, metros, etc. Stating the obvious about how such factors promote both quantitative and qualitative growth in real estate assets would be unnecessary.

Finally, as sales in various locations have increased significantly, it is clear that people now understand the significance of owning real estate assets. The good news from 2022 will continue into the next year, and we anticipate that some of the trends that started in 2022 will gain momentum in 2023.