Homebuying buoyancy to sustain in FY 2023-01-17

Dr. Niranjan Hiranandani –

Owning a home has been historically a strong conviction in the consumers’ belief index. Homeownership has undeniably emerged as a secured asset in the unprecedented polycrisis scenario by the virtue of stability and comfort. The demand for homes has picked up steam amidst covid menace and sales growth has been outperforming.

Homebuying rally hassled to increase in property prices compounded by the commodity inflation globally. The record high property sale has led to drop in overhang of unsold inventory and nudged developers to launch new projects in the market. Since, covid has disrupted the way of living, real estate sector has embraced digitization in full swing. The paradigm shifts in consumers taste and preferences has been well-catered with the help of digital tools and automation.

The system reboot after RERA, Covid, GST bodes well for the sector on account of enhanced transparency, trust, accountability, financial discipline, and customer-centricity. This phenomenon is the captivating domestic as well as global investors bandwagon to co-invest in the branded residential portfolios. Rapid urbanization, infrastructure development led last mile connectivity followed by the decentralization of commercial hubs have unclogged a gamut of peripheral markets for the developers.

Customer heterogeneity has played a significant role in bolstering demand across affordable, mid and luxury property segments across top residential markets. The advantage of premium discounts, higher FSI, and relaxation of developmental regulatory norms in the metro-urbane locations have augured well for clusters, Slum Rehabilitation, and redevelopment residential projects. 

Homebuying trends like eco-friendly, community living, balcony apartments, home automation, and an assemblage of modern-day amenities have been domineering in the residential market post-pandemic. The multi-functional layouts that compel privacy and comfort level have nudged developers to redesign the homes in accordance with the skewed interest of the explicit homebuyers. The average property prices in major Indian cities rose around 5 to 7% in contrast to the global trends where realty prices are contracting.

NRI buyers took the plunge to rebalance their investment portfolio by buying homes in their native land with add on benefits of currency depreciation, festive launches, deal sweeteners and accommodative stance of the developers in the present market dynamics

The bull run for the Indian residential market will continue in FY 23 on the back of sustainable demand, cater to Housing for All objectives of the Government and robust growth of aspirational home seekers. The increased disposable income, better job opportunities, pay hikes, accumulated savings, comparatively low-interest rate, availability of long-term home loans against 80% of mortgaged property value and India’s invincible economic resiliency are the crucial demand denominators. 

Real Estate & Construction sectors are economic growth vectors with huge rippling effects on job creation, the performance of 270 allied industries and investment capital. The higher growth frequency of real estate will lead to a strong GDP growth of India. It is estimated that Indian Real estate will morph into a $1 trillion market with nearly 15% GDP contribution by 2030. 

Author has been past president – ASSOCHAM and MD- Hiranandani Group.