Ad
HomeBuisnessWill house prices become affordable again? Housing market forecasts for 2024 ...

Will house prices become affordable again? Housing market forecasts for 2024 Pi News

Ad

Pi News –

Ad

The Indian real estate landscape has shown tremendous growth and stability over the past few years. Homebuyers, sellers and industry professionals are closely watching potential changes in the housing market and looking forward to a future where home prices may become more affordable. 2023 witnessed the highest number of new project launches in a decade, with the first three quarters surpassing almost all of the previous year’s record. This paves the way for a positive trajectory in 2024 and ensures that the sector experiences sustained growth and momentum in 2024 and beyond.

Also Read: Noida, Greater Noida registered residential properties worth Rs 3,179 crore in Q4 2023; Check the details

- Advertisement -

What will drive the market in 2024?

Economic factors – The real estate sector plays a crucial role in strengthening the economic landscape of the country. By 2025, the sector is expected to continue its bull run and contribute 11-13% to India’s GDP and be worth $1 trillion by 2030. Various factors are responsible for this transition.

Ad

After the pandemic, people realized how important it is to have material wealth. The return-to-offices mandate is also to return professionals to the workplace. People are now looking for property in the city limits compared to earlier preference for suburbs.

Also Read: Rent Rockets Across Indian Cities With 17% YoY Growth, Gurugram Tops With 31% Growth: Report

Cities are undergoing radical changes as a result of relentless urbanization. Amid ongoing global economic uncertainty, the stable and robust nature of real estate has been a source of reassurance and comfort for investors.

NRI Interests – Non-resident Indians (NRIs) are actively maintaining a significant connection with their homeland and are looking to buy property in India. In the financial year 2019-2020, NRIs accounted for about 10% of the total investment in the Indian real estate market. Subsequently, this figure has now reached 15 percent and is expected to rise to 20 percent by the end of 2025.

Government policies are encouraging this trend and Indian builders are also achieving global standards of excellence.

This upheaval has been fueled by a confluence of factors such as rising rental income, continued depreciation of the Indian rupee, accommodative economic policies, emotional attachment to the home country and the resilience of the Indian real estate sector in the face of adversity.

Market dynamics and buyer trends

Top Lifestyle Trends – As India’s economy expands, people with higher disposable incomes want higher lifestyles. Homes decked out with lifestyle amenities like fitness centers, swimming pools and lush landscaping are on the rise.

Not only High Net Worth Individuals (HNIs) and Ultra High Net Worth Individuals (UHNIs), but also upper middle class individuals are stretching their budgets to own larger residences.

The demand for 3BHK has increased significantly in the past year, especially in view of people with hybrid working arrangements wanting to live more spaciously. Prices in IT corridors currently average around Rs 11,000/sqft due to increasing demand for more spacious residences.

Environmental issues – In the last couple of years, the Indian real estate sector has witnessed a significant inclination of buyers towards sustainable properties. From energy-efficient designs and eco-friendly building materials to water conservation initiatives, the real estate sector is redefining the living experience.

Home buyers are looking for a place to live that aligns with their core values ​​and beliefs. New-age homebuyers, especially millennials, are concerned about their environmental responsibilities and are prioritizing homes with renewable energy sources, rainwater harvesting, and energy-efficient appliances.

Sustainable residences optimize the abundance of natural light and ventilation, giving a sense of spaciousness and openness. Especially for those who work from home, it reduces stress levels and improves their mood and productivity.

Although the initial costs for green real estate are relatively higher than those of conventional housing, people can significantly reduce their utility bills later, making it a wise and cost-effective choice in the long run.

Housing benefits – A shortage of ready-to-move-in (RTMI) inventory and rising prices in gated communities are pushing buyers toward construction projects, resale properties and single-family homes, respectively.

Resale properties are in demand because they offer a decent living space without having to wait too long or spend a lot of money on the interior. At the same time, preference is given to houses under construction, as the price of the house is expected to increase significantly after the completion of the project.

Investment changes – Traditionally, commercial properties have been preferred for investment due to their high profitability and minimal maintenance requirements. But in the last two years, the significant increase in the profitability of residential rental properties and their economic efficiency have tipped the scales in their favor. Given the rapid growth in prices, residential properties are expected to outperform their commercial counterparts in terms of capital growth.

Changing Tenant Behavior – A sharp increase in rent also leads to changes in the behavior of tenants. With the option of converting high rents into monthly EMIs, home ownership is emerging as a financially sound alternative for many. According to the NoBroker Annual Real Estate Report 2023, the share of first-time home buyers increased from 62 percent in 2022 to 68 percent in 2023, with sharp increases in rents serving as a significant factor in this shift.

Seller Strategies – Many sellers are also choosing to reinvest in new properties. Favorable market conditions combined with capital growth and attractive rental income make it an attractive financial strategy.

Government initiatives and policy rates

India’s commitment to affordable housing is reinforced by initiatives such as the Pradhan Mantri Awas Yojana (PMAY). With more than 50% of household savings in India invested in real estate, these initiatives are also contributing significantly to the growth of the sector.

The Reserve Bank of India (RBI) will maintain the steady status quo on policy rates. This will act as a catalyst for higher growth in the housing sector. The expected continuation of this stability is expected to further strengthen the demand for housing.

The role of technology in the offline-to-online transition

Technology has changed how we perceive, access and invest in real estate. Availability is instant and market trends are at our fingertips. Proptech advances, from virtual property tours to instant transactions, are redefining the traditional house hunt, transcending the constraints of time and distance.

With the added convenience of metro-based search filters on proptech platforms, people can now explore homes near their offices, unlock more affordable housing options, and at the same time save time on their daily commute. Online platforms strive to be a one-stop shop for everything related to real estate packing and moving, rental agreements, maintenance payments and other housing-related services.

A positive forecast for 2024

The rental market has already reached its peak, with no signs of slowing down in the future. This situation presents a win-win scenario for investors as these property units are poised to continue generating good returns.

In addition, there is a significant revival in construction activity post-Covid, which is driving new momentum in the real estate market. With projects underway and new launches nearing completion, the market is poised to recalibrate, ensuring property price stability. A combination of market dynamics, government initiatives and the changing preferences of homebuyers will set the stage for a booming real estate landscape in 2024, making it a promising year for home ownership.

– The author is Co-Founder, Chief Product and Technology Officer of NoBroker.com. The views expressed are personal.

Disclaimer: The views and investment advice of the experts in this News18.com report are theirs and not those of the website or its management. Readers are advised to consult with certified professionals before making investment decisions.

Ad
RELATED ARTICLES
Ad

Most Popular