Will Indian real estate sector scale new heights in 2022-23?

Every night, as they say, ushers forth a new dawn. For the economy as a whole, the last few years have been extremely difficult. The real estate industry, on the other hand, saw a surge in demand for housing, and despite rising building costs, the market has been functioning well. Let us examine the aspects that must lead to a substantial recovery in India's real estate demand.

Encouraging sales numbers and new launches

In the face of pandemics and blockades, real estate markets across India have demonstrated resiliency and succeeded in preserving their positions. While the housing market continued to recover strongly, commercial real estate remained more stable in late 2021.

Residential sales increased by 51% year over year, hitting 232,903 units in the top eight cities in the country.

According to Knight Frank India, new residences launched in 2021 climbed by 58 percent to 232,382 units. For the commercial office segment, the results were mixed. Despite the fact that the rent volume was reported at 38.1 million m2, it remained at the same level as in 2020, demonstrating the leasing market's potential.

Affordable Prices

Real estate prices are likely to steadily climb as a result of the pent-up ready inventory. Potential purchasers who have been waiting for the pandemic to end are eager to participate in the real estate market, and developers are offering significant discounts to serious buyers because prices are still fair. Furthermore, the Indian government's continuous emphasis on the inexpensive real estate sector is fueling demand. Naturally, this demand will help the real estate business in India sell well in the years 2022-23.

Buoyant Commercial and office spaces sector

The coronavirus pandemic had restricted India Inc to its homes, and the office space industry had taken a significant hit. The return of commercial real estate is actually encouraging and helpful in a full-scale comeback as the Coronavirus has faded and enterprises have started resuming activities from offices.

According to the most recent data provided by the real estate consulting firm Cushman and Weikfield, net office absorption is predicted to return quickly, reaching 30-35 percent by the end of 2022 and reaching up to 29-31 million sq ft (MSF). The new supply could reach 45-46 MSF in 2022 alone, thanks to the restoration of office activity. These are all very encouraging signals of India's real estate sector rebounding and reviving.

Government Push

The Indian government is reframing its commitment to the 'Housing for All' mission in light of the obstacles faced during the pandemic. The government's latest extension of the Pradhan mantra Awas Yojana (Gramin) to 2024 demonstrates its continuing commitment. Furthermore, the government's increased attention on Tier II and Tier III cities has strengthened real estate developers' confidence in initiating new projects in these cities. This will significantly increase housing demand.

Homebuyers from the economically weaker sectors are finding it simpler to obtain a property thanks to the Credit Linked Subsidy Scheme, and this mood will contribute to a healthy rebound of the real estate market in 2022-23.

To summarise, recovering housing demand, reopening of offices, and government backing for the affordable housing segment are all contributing to the real estate sector's steady revival across India. The year 2022-23 will be a year of recovery for India's real estate industry.