India’s real estate sector is witnessing a healthy increase in demand in 2022 and this momentum is expected to hold for the rest of the year. From commercial spaces to the residential market, the overall market outlook is a bright one for the real estate industry.
Despite pandemic exigencies, the sector has continued to show resilience and steady growth in 2021. India’s first wave of Covid-19 brought the sector to a relative standstill for a while. However, by the last quarter of 2020, the market had begun to pick pace, particularly owing to an increase in demand for residential spaces. The second wave of Covid-19 hit the sector just as it had begun to revive itself. Unlike the first wave, the ramifications of the second wave were not as prolonged or prominent. Vaccination drives and lowered infection rates infused optimism in the market. In addition, the festive season fed the sector’s growth.
Buoyed by these factors, the sector made a strong comeback. The growth registered in Q3 2021 is likely to continue and the year is going to end on a positive note. In Q3 2021, according to a report by JLL, residential sales witnessed an upward trajectory, increasing by 65 percent on a sequential basis. The industry is additionally to benefit from a regime of low interest rates, coupled with duty waivers (in some states), realistic property pricing, and attractive offers leading to affordable synergy.
2022 is a significant year for real estate
The real estate sector in India is set to experience around 5% capital value growth in 2022 in the residential segment. Certain projections state that the sales momentum is expected to increase in 2022 as prospective homebuyers will continue to prefer bigger homes, better amenities, and attractive pricing will keep them interested in sealing the deals. Meanwhile, as work resumes in offices, the recovery in the commercial sector and flight-to-quality trend is expected to keep rents stable to increase in 2022. Additionally, the luxury housing market is poised to touch new heights in the coming year.
The budget effect
A number of initiatives have been undertaken by the Government of India with the hope of incentivizing real estate purchases. The announcements made in the Union Budget 2022-2023 will help in creating a thriving atmosphere in the real estate sector.
The government continues to prioritize the affordable housing segment and parallelly looks at ways to strengthen the existing financing systems to provide liquidity to stuck real estate projects. In the first week of December, the Government of India extended the deadline to provide pucca houses to all families in rural India to 2024. The Cabinet decided that the flagship rural scheme, Pradhan Mantri Awas Yojana-Gramin will be provided INR 2.17 lakh crore in additional Central and State funding to achieve its target of building 2.95 crore houses.
Continuing growth
NITI Aayog expects that the Indian real estate sector will reach a market size of $1 trillion by 2030 and will account for 13 percent of India’s GDP by 2025. Already the third-largest sector to bring about economic growth, the real estate industry is expected to continue its upward trajectory in 2022.