2024: Navigating Transformation in Indian Real Estate
As the dawn of 2024 unfolds, the Indian real estate sector stands at the cusp of transformation, driven by evolving market dynamics, policy shifts, and the ongoing recovery from the impacts of the global pandemic. Here is a look at the expectations and potential trends that may shape the real estate landscape in India throughout the year, as stated by the industry insiders.
Residential Real Estate: Affordability And Technology Integration
The residential real estate market in India is anticipated to witness a renewed focus on affordability. With the government's sustained efforts to promote affordable housing through initiatives like Pradhan Mantri Awas Yojana (PMAY), developers are likely to align their strategies to cater to the growing demand in this segment. Additionally, the integration of technology, including virtual property tours, online documentation processes, and smart home solutions, is expected to become more prevalent, enhancing the overall home-buying experience.
Abhishek Bhadra, Head of Research, Magicbricks says, “In 2024, we anticipate a continued surge in the tier I luxury market due to renewed investor interest, and a stronger emphasis on sustainability and smart housing which caters to diverse consumer demands. Urbanisation in tier II cities will continue fuelling commercial and infrastructural development, thereby influencing real estate demand for mid and high segment homes in these cities. We also anticipate residential prices to stabilise in 2024, especially with new housing supply, including a sizable stock of under construction units reaching completion.”
Bhadra further adds, “With all these promising trends, and a supportive government policy towards repo rate, 2024 will be a year of resilient growth of the residential real estate sector.”
Hari Kishan Movva, Senior Vice President, SILA, says, “leading Tier 1 cities have witnessed significant demand over the past few years and we expect this to continue. As these developers have become established players in their home grown markets, we are seeing them start to expand into other Tier 1 cities to capture more market share and establish their brands. Coupled with the fact that the main interests of financial institutions and large established developers is currently disproportionately tilted in favour of Tier 1 cities.”
He adds that the driving growth factor behind this trend is that the demand is larger in Tier 1 cities as these cities continue to be leading business hubs and offer more growth potential for the economy. These Tier 1 cities also offer a more sustainable demand growth for developers in Tier 1 cities as compared to tier 2 cities.
“So while there will be some Tier 2 and Tier 3 markets that offer developers pockets of growth, our view is that Tier 1 cities have still not been saturated and will continue to lead the development trajectory in India.”
Sustainable And Green Practices: Environmentally Conscious Development
Sustainability is likely to take centre stage in the real estate sector, driven by increased awareness of environmental concerns and the government's push towards green practices. Developers may incorporate eco-friendly construction materials, energy-efficient designs, and green spaces within projects. Homebuyers, too, are expected to prioritise properties that align with sustainability goals, reflecting a broader global trend towards responsible and eco-conscious living.
Says Garvit Tiwari, Director & Co-Founder of InfraMantra, "As we stand on the precipice of 2024, the real estate landscape is poised for a transformative journey, shaped by a confluence of factors that promise to redefine the way we buy, sell, and inhabit spaces. Anticipating the trends of the upcoming year requires a nuanced understanding of the economic, societal, and technological forces at play.”
Tiwari says that sustainability is not merely a buzzword but a guiding principle that is set to permeate the real estate sphere in 2024. With an increased awareness of environmental issues, homebuyers are seeking eco-friendly features and energy-efficient designs. “Developers are responding by integrating green technologies, renewable energy sources, and sustainable building practices into their projects, ushering in an era where responsible living is seamlessly woven into the fabric of our homes.”
Summarising his opinion, Tiwari says that 2024 heralds a real estate landscape characterised by flexibility, sustainability, and technological innovation. As we navigate the dynamic currents of this ever-evolving market, adaptability and a keen eye for emerging trends will be the keys to unlocking the doors to success in the world of real estate.
Amrita Gupta, Director of Manglam Group and Founder President of CREDAI Rajasthan Women's Wing says, “As we step into 2024, the sector is set to evolve further with a notable shift towards sustainability. The trend of people choosing sustainable homes speaks volumes about our commitment to a greener and more responsible future. Homebuyers are increasingly embracing ownership, encouraged by a favourable buying environment. While Tier I cities will always have their allure, 2024 is poised to witness a sharper growth curve in Tier II and III cities, as they take the lead in spearheading development and complementing the success of established regions,”
Technology Adoption: PropTech And Digitisation
The adoption of technology, often referred to as PropTech, is poised to accelerate in the real estate industry. From artificial intelligence (AI) for property valuation to blockchain for transparent transactions, digitization is expected to streamline processes and enhance the overall efficiency of the real estate ecosystem. Real estate platforms, offering end-to-end services and data-driven insights, may become increasingly popular, revolutionising the way properties are bought, sold, and managed.
Prasoon Shrivastava, the Founder and CEO of Zepth, reflects on the resilience of the construction sector in 2023 amid challenges such as labour shortages and supply chain disruptions.
“Despite these hurdles, the industry remains optimistic, with new strategies and mitigation methods emerging, showcasing its ability to adapt to changing times. A pivotal shift toward decarbonization takes centre stage in construction projects, emphasising energy efficiency and waste reduction. This underscores the industry's commitment to sustainable development, aligning seamlessly with the growing importance of environmental, social, and governance (ESG) considerations,” says Shrivastava.
He also remarks that technology emerges as a game changer in construction, with digital innovations revolutionising processes, enhancing performance, and surmounting challenges. The adoption of these technologies is not merely a trend but a necessity for staying competitive in the evolving landscape.
“As 2024 unfolds, these trends are expected to deepen, with a continued focus on sustainability, technology integration, and expansion into new markets driving growth in real estate and construction. The trajectory ahead is clear – an unwavering commitment to embracing innovation and sustainability, not just for building structures but for constructing a better tomorrow,” he concludes.
Increase In Investment In Tier II and Tier III Cities
One of the evident indicators of this real estate trend in 2023 was an increase in the percentage of investments moving to tier-II and tier-III cities. According to a recent study by an IPC, 44.4 per cent of real estate land transactions took place in Tier II and Tier III cities between January 2022 and October 2023.
Mrinaal Mittal, Director, Unity Group says that these cities have benefited from specific government initiatives like AMRUT and the Smart Cities Mission, which have transformed them into dynamic residential hubs. “Furthermore, many tier-II and tier-III cities are either well-connected to India's metropolitan hubs or host a small number of multinational corporations, both Indian and foreign. This trend is here to stay and will be seen consistently growing through the next decade corresponding to the urbanisation growth rate.
Aditya Khushwaha, CEO & Director, Axis ECorp, says that in 2024, positive sentiments will persist, focusing on Tier I and II cities. The luxury market will continue to be bullish in 2024. Affordability, improved quality of life, and untapped growth potential attract investors and homebuyers. A significant trend is the rising demand for luxury independent floors in Tier II cities like Chandigarh, Noida, and Goa. Projections indicate Goa's continued spotlight in 2024, particularly in the flourishing holiday home and luxury plotted segment.”
Khushwaha further adds that technological advancements play a pivotal role in reaching Tier II cities and transforming the buyer's journey. “Staying at the forefront of these trends is crucial for aligning offerings with evolving preferences. The future of real estate in these cities is promising, marking an exciting journey towards progress and innovation."
Jash Panchamia - Partner, Suraksha Group said, “The surging demand for luxury and affordable housing in Tier 1 and Tier 2 cities has presented a lucrative opportunity for real estate developers and businesses. The demand for affordable housing is a direct result of urbanisation, rising incomes, and proactive government interventions. Initiatives such as India's Pradhan Mantri Awas Yojana (PMAY) have played a pivotal role in fueling this demand by focusing on providing affordable housing solutions to low-income and middle-income groups.” He further added, “Concurrently, the rise in luxury housing options indicates a widening spectrum of lifestyle choices and an increasing desire for upscale living experiences. This dual trend reflects the diverse housing needs of different socio-economic strata, with efforts to cater to both affordability and aspirations within the real estate market.”
Interest In Indian Real Estate From NRIs
Saurabh Garg, Co-founder & Chief Business Officer, NoBroker.com says that a notable trend has been the heightened interest in Indian real estate from NRIs. “The depreciation of the rupee against major global currencies, together with stable economic conditions in India have enhanced the appeal of Indian real estate. This, in turn, implies an increased demand for property management services offered by proptech platforms which include a suite of services to enable the process of managing property remotely. The advancement of technology has streamlined the process of property management from far away which has boosted NRIs confidence in Indian real estate as an avenue for investment.”
Garg concludes his statement saying, ”As we peer into the future of the sector, the outlook for the coming months reveals a landscape defined by customer confidence, growth and continual expansion."
While the real estate sector is poised for growth, it also faces challenges such as rising construction costs and uncertainties in the economic landscape. Developers will need to navigate these challenges through innovative solutions, cost-effective construction methods, and a keen understanding of market dynamics. The shift towards digital platforms for property transactions and marketing presents an opportunity for real estate professionals to expand their reach and cater to a tech-savvy clientele.
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