Indian real estate: The transformative journey in 2024 and ahead

Source: Realty Economic Times

As we stand on the cusp of a new year, it is only fitting to reflect on the journey the Indian real estate sector has traversed in 2023 and see what the future holds for us in 2024.

A resilient performance

The year 2023 gave a fillip to the upward mobility in India's residential housing market. The Reserve Bank of India's move to keep interest rates steady empowered homebuyers to invest in their dream homes, enabling a wider population to become homeowners.

The unchanged repo rate also assisted the residential real estate market in sustaining sales momentum. This positive change is tied to the overall health of the nation's economy. The 7% growth forecast by the RBIfor GDP in FY24 is not just a digit; it implies more disposable income in people's hands. Today, each of us desires a home with better living standards; the demand for which aligns with a booming economy.

The residential real estate market has been mounting a recovery in 2023 and has tremendously added to India's growth story. The industry is thus strong, with an expected 15-25% spike in new property launches in 2024. There should be about a 10-15% improvement in sales, which is vital for the real estate market as we advance.

The Union Budget has been critical in shaping the industry's direction. The growing demand for affordable housing is helped by expanding the Affordable Housing Program, increasing the PMAY allocation, and raising the income tax deduction limit for home loan interest. This has given a much-needed boost to the sector as a whole.

Government measures not only affect the financial aspect of homebuying; they also reinforce the rules. Increased accountability and transparency could only come with the government's backing of the Real Estate (Regulation and Development) Act (RERA) amendments. Such changes have helped protect the industry against fraud and delays, restoring faith in the real estate business that has steadily risen in the past two years.

Post-Covid, technology emerged as the unsung hero, offering innovative solutions to age-old challenges. The adoption of PropTech gained momentum, transforming how real estate transactions are conducted. From AI-driven analytics for market predictions to blockchain for transparent and secure transactions, technology has become a catalyst for efficiency and trust. This has augured well for the sector.

Smart homes and sustainable living also found themselves at the forefront of consumer preferences. Developers are incorporating eco-friendly practices and green building designs as environmental consciousness grows into their projects. The intersection of technology and sustainability is not merely a trend but a fundamental shift in the industry's ethos.

2024: A tapestry of opportunities

As we look ahead to 2024, the Indian real estate sector stands at the threshold of a new era marked by challenges and unprecedented opportunities.

The new year brings strong growth opportunities for developers, driven by end-user demand spread across segments. In 2023, the industry witnessed a spike in sales of luxury and ultra-luxury homes and plotted developments, pushing overall sales in the top markets to over 2.3 lakh units. In 2024, this figure is forecasted to increase to 3 lakh units. Commercial real estate, too, is poised for a significant rebound, with particular emphasis on office spaces.

However, as with any good story, there are challenges. Hurdles include the high cost of land, congested and unplanned infrastructure, and complex rules and regulations. Yet, the sector's resilience to innovate in confronting these challenges is proven. Infrastructure issues result in inflated costs, project delays, and overall low productivity. It is through overcoming them that the industry can emerge stronger, more future-oriented and aligned to the people's needs.

Developers and investors find the Indian residential real estate market on a long-term growth trajectory. From 2024, the sector will be on a transformative course that will make it thrive and emerge stronger to redefine its potential. Going beyond recovery, the sector is currently pivoting for a balanced future that makes economic sense. With government stability, consistency in interest rates, increased employment, and more private investment, the industry can anticipate an environment that promotes sustainable and robust growth.

The journey ahead is as challenging as it is promising. As industry leaders, it is incumbent upon us to put strong governance systems in place and gain stakeholders' trust by delivering high-quality products. The government should encourage the sector and recognise it as an industry that can have a significant multiplier effect on the Indian economy.