In 2023, driven by strong demand coupled with a robust supply chain, India's real estate market resurrected itself from a two-year pandemic-induced hiatus, ultimately achieving record-breaking performance. Both sales across various segments and the number of new project launches showcased significant growth this year.
Notably, the residential market demonstrated a strong revival, highlighted by data reflecting that 91% of all sales in 2022 were residential in nature. In fact, a recent study by real estate consultancy JLL reported that 196,227 units were sold in the first three quarters of 2023 alone.
The luxury housing market, in particular, experienced rapid expansion during this period. For homes priced in the mid-segment range of Rs 50-75 lakh, sales soared between January and September of 2023. Moreover, the premium segment, defined as properties above Rs 1.50 crore, saw its market share grow significantly—from 18% in the first nine months of 2022 to 22% in the same period of 2023. The highest sales in this premium category were recorded in key metropolitan areas such as Delhi, NCR, and Mumbai.
Insights from Industry Experts
As Pradeep Aggarwal, founder and chairman of Signature Global (India) Ltd, aptly noted, "As the final curtain descends in 2023, the real estate industry witnesses an impressive surge, with Gurugram’s mid-housing sector taking center stage." His year-end commentary underscores an upward trajectory in market trends and highlights an industry adept at addressing the increasing appetite for quality yet affordable housing.
Aditiya Khushwaha, CEO and director of Axis Ecorp, emphasized, "In 2023, the Indian real estate sector experienced significant prosperity, particularly in the luxury real estate segment, witnessing a remarkable 97 percent surge in luxury home sales." His insights shed light on the wealth and desirability surrounding the luxury housing sector.
Khushwaha also indicated that the demand for high-end real estate and vacation rentals isn’t likely to wane going into 2024.
According to Shantanu Gambhir, co-founder and MD of Rise Infraventures Limited, "Gurgaon’s real estate saw a remarkable price appreciation in 2023, outshining Bengaluru and Noida." Despite the rising prices, the city enjoyed an astonishing 28.9% increase in demand quarterly, outpacing the national average. Gambhir forecasts that this trend will likely continue well into 2024.
Mohit Goel, MD of Omaxe Group, observed that the real estate sectors in Tier 1, Tier 2, and Tier 3 cities made substantial strides in 2023, setting an optimistic tone for 2024. Key cities like Lucknow, Chandigarh, and Dwarka have emerged as significant hubs for both high-end residential and commercial real estate, enhancing their attractiveness. He also indicated that improved government policies have fostered this growth, aligning consumer demand and product offerings with the evolving supply landscape.
Radheecka Rakesh Garg, director of Rajdarbar Realty, reported an interesting trend: "In 2023, real estate developers strategically expanded into tier-2 and tier-3 cities, acquiring 1,461 acres of land, primarily for residential developments." This shift illustrates the rising importance of non-metropolitan markets, particularly for low-rise and plotted development formats.
Looking ahead, Garg predicts that the real estate sector will see dynamic developments in 2024, fulfilling the aspirations of smaller Indian cities as developers continuously seek out untapped growth areas.
Notably, Nayan Raheja of Raheja Developers highlighted the tremendous surge in the luxury real estate segment, stating, "The real estate market in India saw exceptional growth in 2023, particularly in the luxury home market." With a staggering 216% increase in luxury home sales, Delhi-NCR has unmistakably emerged as a focal point, fueled by favorable economic indicators that have drawn increased NRI investments. Raheja firmly believes that the upscale housing market is poised for uninterrupted growth in 2024.