The residential properties in India had great progress in 2022, setting new sales records of 68% YoY, establishing real estate as one of the country’s fastest-growing industries. The awareness surrounding the importance of having your own roof over your head and the adjacent government’s favourable affordable housing schemes has led to significant growth in sales of homes and other properties. With people realising the long-term potential of owning a house, v/s renting led to sustainable growth in the segment. With suited economic growth, the premium housing segment will also witness higher demand in the year 2023 and the following. Reforms in stamp duty, the introduction of affordable rental housing complexes and government-aided schemes will boost this asset class while providing relief to the many who do not have access to it.

This is how the scenario looks from the drone view, now let’s get into deeper insights into the real estate market trends of 2023.

· Y2023 should be a blessing in disguise; though we anticipate further downward trends in the global economy, this will be an opportunity for the Indian economy to become a world leader. The real estate sector is going to continue on its journey of long-term growth as we see a continuous rise in GDP per capita, larger disposable incomes, growing urbanization and most of all a larger focus of the world on us as the next big economy.

· The growth potential in 2023 will lead to high demand for offices and commercial space in Tier 1 and Tier 2 cities. The situation has already begun in growing cities like Vadodara, Pune, Jaipur and Hyderabad etc. The co-working sector in India is expected to cross 50 million sq ft by the end of the year 2023 which would be a YOY 15% increase. Managed Office spaces shall continue growing at 10% in 2023. According to a recent JLL report, the net absorption of office space in 2022 across the top seven cities (Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, Kolkata and Pune) has been 38.25 million sq ft.

· Due to the new RBI regulations, where NBFCs are disallowed for early-stage RE investing, AIFs and HNI could be the 2 investors for providing the capital. The RBI’s monetary policy’s new focus on maintaining inflation in check while supporting the growth of the sector is a boon. 

· With the rise in repo rate by 25bps banks’ ability to assist is limited (as loan term extensions have already been exhausted), and the increase would eventually be passed on to borrowers, increasing the monthly payments. RBI monetary policy statement might have far-reaching consequences for the home finance and real estate sectors. With the rise in the repo rate again in response to an inflation goal, the cost of borrowing for housing finance businesses would rise, resulting in higher home loan interest rates for borrowers. It will raise the cost of taking out mortgages and purchasing properties. This may result in a decline in home demand. Furthermore, an increase in interest rates will make it more difficult for consumers to qualify for mortgages, lowering demand even further. To help control inflation, the repo rate has been raised six times in the current financial year (the current repo rate is at 6.5% vs 4% a year ago). With the last push of 35 basis points in December 2022, which was subsequently passed on to end users in total, retail consumers began to feel the heat as their EMIs on current loans began to rise.

· The Union Budget 2023–24 is remarkable in terms of the real estate sector. The Finance Minister has announced “Green Growth” as one of the priorities of the budget. PMAY allocation of ₹79,000 crore is also a good approach for affordable housing. Increased tax rebates will definitely pump in more liquidity in the markets which will provide more disposable income to the lower end of the income spectrum. It may motivate individuals to purchase homes which would further enhance the growth of the real estate sector.

The facts above signify that the prices of real estate are going to rise. It’s best that you invest in a property as soon as your finances allow. This will make for a retirement plan. If you wish to secure your dream home (i.e., 3BHK flats in Vadodara or 4BHK bungalows in Vadodara) before prices go higher, visit us at your earliest convenience! We also have commercial spaces, and we would love you to book a visit for the same. Call us now and get a tour.