Year-End Real Estate Review and Outlook for 2023 By – Mr. Navin Makhija, Managing Director, The Wadhwa Group
Sector performance in 2022
The low-interest rates and fundamental need to own an apartment set the momentum for the real estate sector at the beginning of the year 2022. The new project launches were back in the market as the sector witnessed increasing demand for larger homes with the prevalent work-from-home culture, wherein the units with extra space/study room/ decks emerged as the best-performing category. The Indian real estate market saw a sharp turnaround on the back of healthy demand. As the impact of the pandemic started ebbing, the buyers were back visiting the sites again for inquiries. We immediately saw sales volumes coming back to normal due to a boost in consumer sentiments on the back of favorable Government policies, the necessity for owning a home, all-time low home loan interest rates along with improved offerings from developers. Property purchase which was a sign of wealth quotient before the pandemic has become a necessity now across age groups. Millennials, who favoured rental as an option started looking for an escape from a lifelong rental web and realized the importance of owning a home due to higher affordability on account of the reduced gap between loans to rent. These factors helped drive demand and boosted sales in the festive season and were the key in ridding the sector of the impact created by the pandemic in the previous two years.
Purchase mindset of the homebuyers has been slowly and steadily moving towards the branded developers having a good track record of execution and who can assure them of timely project delivery and quality construction. We have witnessed a demand for OC-received projects that commands a premium and are sold quickly to avoid any risk of construction uncertainty.
Outlook for 2023
Real estate industry has played a dominant role towards the country’s economic prosperity. In the coming months, the expectation of the buyers and developers ought to rise as the sector has witnessed lots of new government policies. These policies will help the industry to be more organized and will provide a boost to both residential as well as commercial real estate.
The Government has laid a strong emphasis on the expansion of Mumbai through a lot of ongoing and upcoming infrastructural developments. Mumbai being a concrete jungle will soon be expanding beyond its territories like Panvel, Ulwe, Uran, Dronagiri, Thane, Kalyan, Palghar, etc, and will be connected to current business districts through the support of ongoing infrastructure like the Navi Mumbai Airport, Mumbai Trans Harbour Link, Virar-Alibaug Multimodal Corridor, Coastal Road, Goregaon-Mulund Link Road, Airoli-Katai Tunnel and Metro Connectivity to name a few. With such fast-paced infrastructure evolution and exceptional connectivity, the real estate market is slated to create a strong demand in 2023.
We have already witnessed a very robust demand in the past few quarters on the back of improved consumer sentiments. We anticipate the Government to announce incentives that will propel the growth of the sector such as introducing tax breaks which will increase public spending, less transaction cost, etc. Developers should focus to complete the existing projects, sales will happen as the buyer gets to see development and the project reaches a close to completion stage, therefore, the demand for good developers and ready-to-move-in inventory will continue. Trusted and reputed developers have witnessed relatively better sales in mid-income & affordable housing segments and will continue to dominate in 2023 as well.
Quality of life has become one of the most important aspects in home buying. Therefore the growing aspirations of the homebuyers, the transformation of lifestyle, and ease of living are the major factors pushing the demand of mid-segment and luxury housing. With this, digitally enabled homes have now set up a new trend in this post-Covid real estate market. The millennial demographic has contributed drastically to the overall technological advancement in real estate.
Post-pandemic, we have witnessed an inclination of homebuyers towards township projects as they offer a complete living experience to the homebuyers, an end-to-end solution for their needs as well as an integrated lifestyle with a self-contained ecosystem. The demand for an integrated living would continue in 2023 as well due to the ease of living that they offer.