Real Estate Market in India: 2023 and Beyond

Real estate market in India is booming at an exponential rate. After the slowdown for two consecutive years caused by the global Covid-19 outbreak, the sector is making a phenomenal comeback – registering unprecedented growth. Currently, real estate is one of India’s most prominent industries in terms of generating revenue and employment opportunities. Industry experts view 2023-24 as a boom year for India’s property market.    

In the third quarter of 2023, the Indian residential property market achieved remarkable success, with sales of 120,280 units across the top seven cities. This marked a significant 36 percent increase compared to the same period the previous year.  The Mumbai real estate market is ranked fourth in the Prime Global Cities Index, for Q3 2023.  The index showcases growth in average annual prices of prime residential or luxury homes.  In India, Mumbai followed by Delhi at the 10th spot and Bengaluru was ranked 17th.

Among these top seven cities, Mumbai led the way with the highest housing sales, totalling approximately 38,500 units, followed closely by Pune with approximately 22,880 units.

The continuous upward momentum in housing sales has been partially attributed to the Reserve Bank of India’s decision to maintain a stable repo rate in recent monetary policies, thereby keeping home loan interest rates stable and boosting housing purchase sentiment.

The ever-rising aspiration of owning a home mainly driven by rising income levels has meant a strong demand for housing over the last couple of years.

Policy Reforms and Regulatory Environment that Spurred the Growth of Real Estate Sector.

• RERA
• Amendment to the Benami Transactions Act
• Good and Services Tax (GST)

Government Initiatives

Initiatives such as Pradhan Mantri Awas Yojana (PMAY) and Goods and Services Tax (GST) reforms have aimed to boost the real estate sector and provide affordable housing. “Housing for All” have played a role in driving demand in the residential sector.  The government of India’s decision to grant infrastructure status to affordable housing has given a boost to the sector. As a result, such projects can avail low borrowing rates, tax concessions, and increased capital inflow – private as well as foreign.

Foreign Direct Investment (FDI) in Real Estate

For long, real estate has been one of the most protected industries in India. But the decision of the government to allow foreign direct investment in the sector under the automatic route is bringing a massive change to the country’s property market. FDI is also expected to pave way for certain international trade practices into India’s real estate sector.

Conclusion

As per the Mumbai real estate market forecast, the property sector in Mumbai has undergone a significant change in 2023, driven by various trends and factors. Whether it’s the growth of commercial properties in Mumbai or the changing demands from residential apartments in Mumbai, it’s clear that the city’s real estate sector is constantly evolving.

Questions

Q1. What are the key trends in the Mumbai real estate market?

High-end luxury projects, co-living spaces, and sustainable homes are some of the key trends.

Q2. What is the forecast for the Mumbai real estate market in the coming years?

Flexible office spaces, technology-based optimisation, and an increased focus on amenities are some of the forecasted trends.

Q3. What are some of the key challenges facing the Mumbai real estate market?

The increasing population, lack of land & parking space, air pollution and growing businesses looking for affordable commercial spaces are some of the glaring challenges.