The real estate sector has faced many difficult years in the recent past. During the last few years, this sector has faced many setbacks one after the other. Demonetisation, GST, RERA, Corona pandemic and default of real estate developers troubled the entire sector for a long time. However, now it seems that the good days of the real estate sector are not far away. In recent times, conditions for the sector have improved rapidly.
According to a report by NAREDCO and KPMG India, India’s real estate sector is showing strong signs of growth. In the financial year 2020-21, the size of the Indian real estate sector was $ 200 billion. It has been said in the report that this size can increase to $ 1 trillion by 2024-25. Let us know how the signals are being received regarding the real estate sector especially housing…
Housing Demand Trend
First of all, know the trend of demand for houses. Last year proved to be good for the residential real estate sector. During the year 2022, a new record of new sales has been created in the residential real estate sector. During this period, a spectacular growth of 68 percent was registered in the sales. The good thing is that good demand has started coming out from small and medium cities, which is the strongest sign of a better future. The trend of big cities is also good. An Anarock report states that during the first quarter of 2023, the demand for homes in seven major cities of the country increased to 1.14 lakh units, from 99,500 units a year ago. At the same time, a report by Knight Frank states that the sale of houses in eight major cities of the country increased by 34 percent during the last financial year.
House Size Increases
A separate report by Anarock also states that the demand for new homes in the country is more for large homes. During the last five years, the size of new houses has increased by 7 percent. The average size of houses in seven major cities of the country has now increased to 1,225 sq ft, which used to be around 1,150 sq ft in 2018.
Foreign Investment
Investment had become a big problem for the real estate sector, but it seems that now the problems are going to go away in this case too. During the year 2017 to 2022, foreign portfolio investors have invested $ 26.6 billion i.e. about Rs 2.20 lakh crore in it.
Private Equity Investment (PE Investment)
Another good news on the investment front is that along with FPI, PE investment is also increasing. According to international property consultant Savills, by the end of the year 2022, private equity investment in the Indian real estate sector had reached $3.4 billion. In this way, for the first time after Kovid, PE investment has reached this level.
Interest Rate
During the last one year, the Reserve Bank increased the repo rate by 2.50 percent, after which almost all banks made home loans costlier in more or less the same proportion. Even after the increase in interest rates, a boom was being seen in the sale of houses. Now the Reserve Bank has stopped the process of increasing the repo rate. The repo rate has been kept constant in the MPC meeting of April and June 2023. Due to this, banks can reduce the interest rates in the coming days. This can act as a booster for the housing sector.
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