India’s real estate sector faced a mixed year in 2024, marked by a marginal dip in housing sales, contrasting performances across segments, and evolving buyer preferences. The Indian real estate market trends 2024 reflect a complex interplay of economic challenges, policy expectations, and market resilience.
A Year of Contrasts in Residential Real Estate
After three consecutive years of robust growth, housing sales in India declined by 4% in 2024, according to Anarock data. The de-growth follows a period of exceptional recovery from the pandemic-induced downturn, with sales growing 71%, 54%, and 31% in 2021, 2022, and 2023, respectively.
Key factors contributing to this decline include:
- High Base Effect: Record-breaking sales and launches in 2023 set a high benchmark.
- Housing Price Inflation: An average price increase of 21% this year dampened affordability.
- Elevated Borrowing Costs: Rising interest rates reduced buyers’ purchasing power.
Anuj Puri, Chairman of Anarock, described 2024 as a “mixed bag” for the residential sector. While demand in the affordable housing segment weakened, luxury homes experienced strong sales momentum.
Luxury Housing: The Silver Lining
The luxury and ultra-luxury segments remained bright spots. Projects like DLF’s The Dahlias in Gurugram, valued at ₹26,000 crore, showcased the unwavering appetite for premium properties. These homes, designed for affluent buyers seeking larger spaces and enhanced lifestyles, often sold out within days of their launch.
Boman Irani, National President of CREDAI, highlighted the growing trend of buyers prioritizing ownership over renting. This shift, coupled with a rising preference for high-end residences, validated the resilience of the luxury segment.
Challenges for Affordable Housing
The affordable and mid-income housing categories struggled due to steep prices and limited fiscal incentives. Real estate developers have long advocated for:
- Higher deduction limits on home loan interest under the Income Tax Act.
- Expanded benefits under Section 80C for first-time buyers.
These measures, coupled with lower borrowing costs, are critical for reviving demand in this segment.
Policy Expectations: Budget 2025 on the Horizon
As the sector eyes the Union Budget 2025, developers and investors are optimistic about favorable policies. Key expectations include:
- Interest rate cuts by the RBI to enhance affordability.
- Streamlined definitions and benefits for affordable housing.
- Tax incentives to boost demand across segments.
Commercial Real Estate and Industrial Growth
While the housing sector saw a modest decline, India’s office market recorded stellar growth. Gross leasing activity across eight major cities surged 14%, reaching an all-time high of 85 million square feet, as reported by Cushman & Wakefield.
This growth was driven by:
- Foreign companies establishing Global Capability Centers (GCCs).
- Expanding demand for managed office spaces.
- Increased investments through innovative instruments like Small and Medium Real Estate Investment Trusts (SM-REITs).
Similarly, the demand for industrial and logistics spaces soared, fueled by e-commerce growth and government initiatives promoting manufacturing.
Institutional Investments and Consolidation Trends
The Indian real estate market trends 2024 also highlighted significant institutional investments, with nearly USD 9 billion inflows—a 51% year-on-year increase. Consolidation within the sector gained momentum as consumer preferences shifted toward reputed developers with proven track records.
Positive Developments in Stalled Projects
In 2024, notable resolutions in stalled housing projects offered hope to homebuyers:
- Suraksha Group received approval to complete Jaypee Infratech Ltd projects, delivering 20,000 units.
- NBCC was authorized to finish 16 Supertech Ltd projects and ongoing Amrapali Group developments.
However, challenges persist for buyers of stalled Unitech Ltd projects, underscoring the need for more systemic solutions.
Future Outlook for 2025
Real estate experts anticipate stabilization in the housing market in 2025, with subdued price growth compared to 2024. Irani of CREDAI emphasized the need for government interventions to address policy bottlenecks and affordability concerns, ensuring inclusive growth.
India’s real estate market, valued at nearly USD 500 billion in 2022, is projected to reach USD 5.8 trillion by 2047. To achieve this potential, the sector must navigate challenges, adapt to evolving buyer preferences, and leverage favorable policy changes.
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