In India, the old age saying of ‘Roti, Kapda aur Makaan’ still holds much value and relevance – it still resonates with every common man in India. And rightly so, a Home is a Home, much more than just 4 walls; it harbors dreams and builds value, both monetary and emotionally, and hence is often revered by the Indian population and is consistently viewed as an aspirational and profound investment.

The industry as a whole had witnessed a rollercoaster ride in the past 5-6 years, with the implementation of groundbreaking reforms like GST, RERA that essentially changed the face of the industry. While there were initially some teething issues, RERA, in particular, has been instrumental in enhancing transparency among stakeholders that laid down an extremely strong foundation – the fruits of which we’re witnessing today.

2023 has indeed been a boon for Indian real estate, with the festive season building further on the success of the 2022 and 2021 seasons, where we also saw impressive numbers of sales close to 1.5L units and 1.15L units, respectively. This year, we are witnessing record breaking registrations across segments all throughout the year and during the festive season, and it’s safe to say that this is a culmination of a number of crucial factors:

Conducive Environment of the Festive Season

Perceived to be a highly auspicious time, the festive season provides the perfect buying environment for homebuyers, and several other fence sitters to come to the fore and fulfill their dreams of owning a house. This has been quite evident owing to a conducive eco-system that currently exists, and much of it is owing to the various financial incentives that developers offer which enhances the purchasing power of the homebuyers. Increased transparency, initially brought upon by RERA but embraced by the developer fraternity who improved upon it, has only helped to catapult this momentum and ensure streamlined interface with homebuyers, which has had a huge impact on their confidence.

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Changing Sentiments and Preferences of Homebuyers: Buying Instead of Renting

Homebuyers have gradually shifted from the renting bandwagon to invest in a home and buy their dream properties. This is also an impact that we have seen in the post covid era, however there is a unified realization about the need to invest in your own home that also forms a huge part of the ongoing wave of housing sales. In addition to this, homebuyers are also looking at buying bigger and better houses – a reflection of the overall macro-economic situation and the highly positive sentiments towards housing as a long term, and capital-intensive investment for Indian citizens.

Additionally, new-age homebuyers are also looking at properties that are led by technology, design and innovation and promoting sustainability. Hence, developers have collaborated with urban space designers, onboarded sustainability specialists who are enabling these aspects to meet the demand and ensuring that both stakeholders are on the same page. The appropriate demand-supply match has also been key to the ongoing homebuying trend.

Stable Economy and Lending Environment

At a macro-economic level, India currently possesses an extremely stabilized economy which has a huge cascading effect on not just multi-sectoral growth but also at an individual level. Increased job security helps to increase the frequency of high capital investments due to the ability to plan long term and build high value assets. Additionally, the relatively stable lending environment also helps in sustaining homebuyer sentiments, although over a period of a home loan tenure of over 20/25 years, lending rates usually even out and the lifetime cost/ interest payments remain the same with minimal difference.

Way Forward

Given the current environment, homebuyers appetite to buy – and buy bigger – as well as the economic factors at play, we expect this momentum to continue for at least a few more quarters. With strong Government initiatives and programs, there is an eco-system which will keep bringing in more supply and demand for housing – across segments – and ensure sustained sectoral and economic momentum. We hope to end 2023 on a high with strong numbers in the last quarter of FY 2023/24, with the budget at the start of the new year hopefully giving Indian real estate a further boost.

(By Boman Irani, President, CREDAI National. Views are personal)