Year-End Real Estate Review and Outlook for 2023

By Shraddha Kedia-Agarwal, Director, Transcon Developers

Sector performance in 2022

While India’s real estate market makes a certain move for investment due to attractive prices, increased transparency, and digital progression; the fact that the world has restored itself after the pandemic jolt is an opportunity in itself. The all-time low interest regime gave a much-needed push to the real estate sector especially the luxury housing segment. The Indian Government has recalibrated its approach towards remobilizing the economy and introduced various reforms to ensure adequate liquidity in the system. RBI's accommodative stance for such a long duration too helped mitigate the effects of Covid-19 on businesses and was a key to the recovery of real estate and the overall economy. However, the recent consecutive hike in interest rates has still not affected the housing demand. The interest rates which were still lower than the pre-Covid levels for the last few quarters have already given a boost to the real estate sector upticking the demand and enhancing the confidence of the homebuyers.

Today, in the post-pandemic world processes have rapidly moved to online modes offering investors much transactional ease, even if they are across borders. The recent volatile stock market and the currency benefit of the rupee-dollar exchange have made it favourable for the NRIs to invest in Real Estate in India. A large section of non-residential Indians, previously aligned to the stock market as primary investment policy have shifted more to real estate as a form of long-term investment. Also, the rupee’s decline in value against the dollar, heavy returns, good rental, improving infrastructure have been the additional key drivers.

Outlook for 2023

In the post-Covid world, there is a shift in demand for sea-facing homes with large open spaces like balconies, terraces, courtyards, gardens, and parks in the vicinity. Work-from-home and the hybrid work culture have changed the pattern for most home buyers in the post-Covid era. Owning a home is no more a matter of investment preference, but a necessity, given the boost that a luxury residence has come to lodge in the wider perspective of the work-life choices. The latest trends of customer preferences have shifted from premium real estate to a more sophisticated approach, buyers who want to get a lifestyle that can flawlessly include the work-from-home notion, while not giving up on the lavishness and comforts of luxury living. These trends are expected to continue in 2023 as well.

The residential real estate market in India has become more lucrative for ultra-high net-worth individuals (UHNIs) and NRIs as a result of the increased transparency and ease in investment norms. With RERA ensuring transparency and laws allowing 100% FDI in construction, Indian real estate is witnessing sharp investment infusions from NRIs. The new class of ultra-rich people is on a buying spree of luxury homes in global cities like Mumbai, Bangalore, etc. The Indian markets are proving their grit and potential, it is now time for investors to decide if they want to benefit from India’s future potential.