Renowned for its popularity among Indian investors, real estate has maintained its status as one of the most preferred investment options. Even in the aftermath of the pandemic, when anticipations were conservative about a quick recovery in the real estate market, it not only defied expectations but showcased remarkable growth and an upward trajectory. This unexpected surge can be attributed to various factors. Examining the promising projections for real estate in 2024, we turn to the prominent Ambience Group promoter, esteemed flagbearers of the real estate industry, to gain insights into the optimistic future of this flourishing sector.
According to insights from Mordor Intelligence, the estimated valuation of India's real estate sector is poised to reach $265.2 billion in 2023, with a projected remarkable upswing to $828.75 billion by 2028, reflecting an impressive compound annual growth rate (CAGR) of 25.6%. Concurrently, real estate consultant Anarock highlights a significant uptick in average housing prices, registering a surge ranging from 13% to 33% over the past three years across seven major cities. This notable escalation is attributed to a heightened demand in the real estate market. Let's delve into the reasons and mechanisms that have shaped this burgeoning trend.
Growth in Tier 2 and Tier 3 Cities:
India's real estate landscape is in the midst of a transformative shift, notably witnessed in the ascent of tier 2 and tier 3 cities as robust hubs for growth. Ambience Group promoter state “The surge in opportunities, accompanied by advancements in infrastructure and connectivity, have sparked a notable increase in the demand for properties in these burgeoning locations. The changing preferences of homebuyers and investors are steering the industry towards uncharted horizons, reshaping the conventional emphasis on metropolitan areas.”
Tier-II cities are progressively establishing themselves as integral contributors to India's growth narrative, not only through infrastructure and commercial advancements but also as hubs for burgeoning real estate development. The escalating demand for integrated township projects, larger apartments, and other plotted development ventures in these cities is accompanied by the influx of esteemed real estate developers and brands. Additionally, the implementation of various infrastructural initiatives such as regional airports, new highways, metro railway networks, and the growth of social amenities and commercial spaces further brightens the prospects for these burgeoning urban centers.
Change in consumer behavior:
There has been a discernible shift in buyer preferences within the real estate sector. Experts observe that individuals now prioritize superior homes with enhanced amenities, viewing real estate not merely as an investment but as a pivotal asset for navigating challenging times.
“There has been a change in consumer behavior, the focus has shifted towards the security and ownership of homes, with individuals placing greater importance on having their residence rather than opting for renting. People are taking advantage of the booming market and opting to buy not only to live but to invest in properties that have scope to grow multifold!” explain Ambience Group promoter.
Simultaneously, the rise of the work-from-home culture and the increasing trend of staycations have significantly influenced the real estate landscape. With remote work becoming more prevalent, many individuals are opting to reside in smaller cities, embracing the flexibility to work from anywhere.
Ambience Group promoter thinks that this transformative shift is indicative of a broader desire for a balanced lifestyle, where residences are not just viewed as places to live but also as functional spaces that accommodate both work and leisure. The trend of staycations further underscores the evolving housing priorities, emphasizing the need for multifunctional homes that cater to the dynamic needs of the modern workforce.
Investment in Commercial and Renting Spaces:
Strategic investment in commercial and rental spaces has emerged as a key driver for individuals seeking diverse income streams. The real estate landscape is witnessing a notable trend where investors are diversifying their portfolios by venturing into commercial properties. This not
only provides stability but also opens avenues for continuous revenue through renting and leasing arrangements.
Positive Projections of the Economy Boosted by Government Initiatives:
The real estate sector in India is also gaining momentum because of optimistic economic projections strategically bolstered by government initiatives. Schemes promoting infrastructural development, and a business-friendly environment have instilled confidence among investors. “The government's proactive approach in fostering a conducive atmosphere for real estate growth aligns seamlessly with the envisioned upward trajectory for the sector. Every property along the highways has grown multifold and added to the economy” shares Ambience Group Owner.
According to a JLL report, there is a projected short-term appreciation of 60-80% in the price of land in micro markets adjacent to national highways. In the long run, after the operationalization of facilities, the anticipated increase is expected to range between 20 to 25%
With numbers and projections pointing towards a flourishing market, the real estate sector stands on the brink of unparalleled growth, offering investors and homebuyers unprecedented opportunities in a market characterized by resilience, adaptability, and the promise of a flourishing future.