India’s residential real estate market is expected to repeat one of its top performances in 2023 with housing demand projected to scale 3.17 lakh units — the third highest since 2013. In 2013 and 2014, around 3.19 lakh and 3.43 lakh residential units, respectively, were sold across the top seven cities.
However, it is unlikely that residential sales in the domestic market will be able to match the 2014 peak “anytime soon”, a report by Anarock Property Consultants said.
The consultancy said unprecedented growth in homeownership sentiment, faster technology adoption and digital marketing, and innovative business practices had softened the overall impact of Covid-19. “In fact, the housing market in top seven cities is likely to attain a new peak by 2023, when sales are estimated to cross 3.17 lakh units and new launches 2.62 lakh units,” it said.
Anarock data between 2013 and 2023 shows that housing demand hit a peak of 3.43 lakh units in 2014, which came after recording sales of 3.19 lakh units the year before. The momentum continued in 2015 with 3.08 lakh units, after which sales declined, bottoming out in 2017 at 2.11 lakh units.
Anarock Property Consultants chairman Anuj Puri the said housing sector had showed healthy year-on-year growth since 2017 until the latest peak year of 2019 (2.61 lakh units), but this trajectory was derailed by the pandemic. Otherwise, 2020 had been expected to be a watershed year for the industry.
While H2 2020 did showcase the remarkable resilience of Indian residential real estate, a new bottom was created in 2020 with housing sales plunging to nearly 1.38 lakh units, while new launches dropped to 1.28 lakh units. The year is not one that the industry is likely to forget soon, he said.
Encouragingly, the ongoing trend of sales exceeding supply is likely to continue, and 2021 is expected to witness an increase of 35% in housing launches and 30% in sales over the previous year. However, against the peak year of 2019, supply and sales may be lower by 28% and 31%, respectively.
Puri attributes this trend to sustained low interest rates, overall improvement in the job market, resumed economic activity, sustained stock market growth, government interventions to combat the pandemic’s deleterious effects, and an increasing desire to own physical assets during times of unprecedented uncertainty.
With vaccination drive gaining significant momentum and the spread of Covid-19 under better control for now, 2023 will very likely emerge as the new peak year that breaches 2019 levels, with supply projected to grow by 11% and sales by 22% over 2019, Puri said.
Source : Financial Express