After seeing massive growth in the Indian real estate sector in the year 2020-2022, a doubt occurs these days. “Will Indian Real Estate Crash in 2023?”
Based on the latest industry reports, a study by The Hindu says, “2022 was when economies across the globe were dealing with post-pandemic disruptions, escalating geopolitical situations, and the risk of oncoming inflation.
The year was also classified as a phase of recovery for the Indian economy. The real estate sector, in particular, showed resilience and withstood market volatility thanks to urbanisation, a growing population, and rising incomes.
According to recent industry reports, India’s real estate market is expected to reach ₹13,00,000 crore by 2023.”
But is it that simple? Amidst this wave of inflation and economic downfall worldwide, is it just to expect high growth in the Indian real estate market? Are people likely to invest in or buy property in Hyderabad or other Indian cities?
Let’s find answers to our questions below.
Factors that Affect the Growth of Real Estate in India in 2023:
Although young and newbie investors may find it a little “slow” or boring, it might not be the actual case. Along with luxury property developers, 2023 can be the year for investors who don’t have a portfolio worth a huge amount like crores.
As the top builders in Hyderabad and other cities have noted, an overall 8-9% growth is expected in Indian real estate in 2023. An expected rise in the newly-created jobs and the recent slump in the stock market led people to the housing market, which is a positive sign for real estate growth in the country.
Apart from these factors, there are a few factors that hint at high growth in Indian real estate in the near future. They are as follows:
1. Tax Incentives and Lower Tax Rates:
Keep everything aside for a while! And rejoice in the fact that low-interest rates can make a positive impact on the real estate market. Also, the government’s recent announcements on tax-related incentives may help homebuyers and investors.
Along with tier-1 cities, tier-2 and tier-3 cities will also see high growth in their real estate markets due to these initiatives. Investors across the country are expected to receive a high return too.
2. Growth of Commercial Sectors:
IT companies and other sectors are returning back to the offline mode or, in some cases introducing hybrid mode. It leads to a demand for physical office set-ups. The retail industry is also seeing more footfall and asking for more developments. Thus, with the increasing demand for commercial real estate, the overall real estate market in India is likely to grow more than ever.
3. Upward Sales of Residential Properties:
The housing market is always the major driving force in the Indian real estate market’s growth and sustainability. According to Reuters, residential property prices are expected to rise nearly 7.5 % in India while 5.5 to 6.5 % in Chennai and Bengaluru.
4-5% is expected to be seen in other major cities. The residential real estate market experienced a good time in 2022, which is supposed to be continued this year also.
4. Government Programmes and Policies:
There are policies like “Housing for All” and “Pradhan Mantri Awas Yojana.” Also, various infrastructure development plans are proposed and implemented by the Government. It has planned and is building new airports, metros, and highways.
Smart city programmes are also there. Together these plans and policies contribute to the growth of real estate in India.
5. Indian Cities You Should Plan to Invest in:
Whether a newbie investor or a seasoned one, an idea of market conditions can help you make the right decision. Some of the hot cities for real estate investment are:
c) Navi Mumbai
The emergence of budding entrepreneurs and common people’s growing interest in real estate investment hint at a bright future for the Indian real estate market.
If the SMEs get more funding, more profitable assets like SCO(shop-cum-office) plots are developed, and green building technology gets more support, a brighter future is expected.