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The Resilient Rise of Indian Real Estate: A Festive Boom, NRI Investment, and Innovative Ownership Models

Last Updated on November 4, 2023 by Admin

The Indian real estate market is witnessing a remarkable resurgence, with various factors contributing to its robust growth. Here’s an in-depth look at the current trends shaping the real estate landscape in India:

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Indian Real Estate: Current Scenario Oct-Nov 2023

Delhi-NCR’s Market Revival:

The Delhi-NCR real estate market has seen a significant turnaround, thanks to the collective efforts of homebuyers who have brought back the market’s mojo. With increased transparency and better regulatory practices post-RERA, consumer confidence has been restored. The region has experienced a surge in demand for both residential and commercial properties, with improved infrastructure and connectivity further bolstering the market.

Mumbai’s Global Standing:

Mumbai has ranked 4th in the global housing price rise, showcasing the city’s unwavering appeal and the resilience of its real estate market. Despite the pandemic, Mumbai’s property market has not only recovered but also shown impressive growth, with luxury and prime residential segments particularly witnessing high demand.

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Festive Season Sales:

The festive season in India traditionally brings a wave of optimism in the real estate sector. This period has seen a 36% annual growth in housing sales in the nation’s top 7 cities, with over 1.20 lakh units sold in Q3 2023 alone. Despite rising property prices, the festive fervor has encouraged buyers to make significant investments, with developers offering a range of incentives to capitalize on the positive market sentiment.

NRI Investment Surge:

There has been a notable increase in NRI investments in the Indian real estate market. With the Indian diaspora looking to maintain a connection with their homeland, investments have soared, particularly in cities like Mumbai. This trend has been supported by the strong India growth story and the desire among NRIs to have a base in their country of origin.

Fractional Ownership:

A new investment trend, fractional ownership, is gaining traction in India. This model allows investors to own a share of high-value property at a fraction of the cost, making it an attractive option for HNIs and end-users alike. With the potential for steady returns and increased liquidity, fractional ownership is poised to become a significant part of the real estate investment landscape.

Kerala as an Emerging Destination:

While there was an issue accessing detailed insights on Kerala, it’s known that the state is becoming an increasingly popular real estate destination. With its scenic beauty, robust infrastructure, and growing IT hubs, Kerala is attracting a diverse range of investors and homebuyers.

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Institutional Investments:

The Indian real estate market has seen a significant influx of institutional investments. According to recent reports, investments reached $4.6 billion during January-September 2023, marking a 27% increase year-on-year. This indicates strong confidence from institutional investors in the Indian real estate sector’s growth potential.

Funding Surge:

The funding in the Indian real estate sector has seen an 82% increase in Q3 2023 compared to the same period last year. This uptick in funding is a testament to the sector’s robust recovery and the lucrative opportunities it presents to investors.

Industrial and Logistics Growth:

The industrial and logistics sectors have recorded unprecedented real estate leasing in the top 8 cities of India. This growth is driven by the expansion of e-commerce and the need for sophisticated supply chain solutions, which in turn fuel the demand for warehousing and logistics spaces.

Market Size Projection:

The size of the Indian real estate sector is estimated to jump more than 12-fold to USD 5.8 trillion by 2047 from USD 477 billion last year. This projection underscores the long-term growth trajectory and the significant role the real estate sector is expected to play in the Indian economy.

Residential Sales Outlook:

Home sales in India in 2023 are expected to be 30% higher than in 2022, according to Colliers. This optimistic outlook is supported by the strong sales performance in various regions, including the National Capital Region (NCR), which recorded nearly 15,900 housing unit sales in Q3 2023 alone.

Regional Sales Distribution:

Within the NCR, Gurugram has emerged as a leader, contributing 56% to the region’s residential sales in Q3 2023. Other areas such as Greater Noida, Noida, and Ghaziabad also showed significant activity, contributing 15%, 10%, and 10% to the total sales, respectively.

These recent developments indicate that the Indian real estate market is not only recovering from the pandemic-induced slowdown but is also poised for a period of sustained growth. The combination of increased institutional investments, a surge in funding, and a robust sales outlook, along with innovative investment models like fractional ownership, are set to redefine the landscape of Indian real estate in the coming years.

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Summary:

  • Revitalization in Delhi-NCR: Post-RERA reforms have restored buyer confidence, propelling a demand surge in residential and commercial sectors.
  • Mumbai’s Stellar Performance: The city’s property market ranks 4th globally for housing price increases, reflecting its enduring appeal and market resilience.
  • Festive Boost in Sales: India’s festive season witnesses a 36% annual increase in property sales, with over 1.20 lakh units sold in Q3 2023, despite rising prices.
  • NRI Investment Trends: Non-resident Indian investment in real estate has escalated, with Mumbai seeing a significant uptick, driven by the desire for a home base in India.
  • Emergence of Fractional Ownership: This new investment model is gaining ground, offering shares in high-value properties, and providing affordability, liquidity, and steady returns.
  • Projected Market Growth: Institutional investments and funding in Indian real estate are on the rise, with the market size expected to grow exponentially to USD 5.8 trillion by 2047.
  • Regional Sales Insights: NCR’s housing market thrives, with Gurugram leading sales, and other regions like Greater Noida and Ghaziabad contributing notable shares.

The Indian real estate sector is demonstrating remarkable resilience and growth, buoyed by festive sales, NRI investments, and innovative investment models like fractional ownership. As the market continues to evolve, these trends are expected to shape the future of real estate in India, offering both challenges and opportunities for investors and homebuyers.

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