The Indian real estate market has shown excellent resilience even during high inflation rates, growth uncertainties, and increasing costs of capital. In this respect, Kanika Gupta Shori, Founder and COO of Square Yards, has mentioned that the property rates will mostly increase by 10% to 15% in the year 2024. Shori presumes that with the increase in the cost of building materials, the demand for homes will increase consistently while the prices of properties in top cities will also increase by 10-15% throughout 2024.
Shori also adds that people are showing a strong demand for home ownership which has resulted in consistency in the sale of properties even when the property prices are increasing drastically. The same trend will still be followed in the next year. This will be further supported by increasing developer’s cash flow, increasing trends in the sale of houses, an increase in the number of total house launches, and the sentiment of people to get their own homes for the pursuit of financial security.
It is expected that this robustness will continue to grow despite the increasing price rates. In the current year, the average prices of residential properties have increased in the range of 8-18% in Q3 across the top seven cities as compared to the previous year 2022. This increase is a direct result of an increase in the prices of raw materials and an increase in demand.
Moreover, the average property prices in these seven cities have increased by 11% this year. However, questions arise about which type of properties to invest in. Shori says that with the increase in the demand for home ownership, the demand for affordable properties will increase. People who are trying to shift from rental properties to owning houses will purchase 2 BHKs and 3 BHKs. Also, consumers will have unwavering confidence in the real estate sector even after the increase in prices.
The prices of luxury houses will also increase as more Non-Resident Indians (NRIs) and High Net Worth Individuals (HNIs) are trying to buy larger and more sophisticated asset classes. They are trying to take advantage of the decline in Indian currencies. Also, they prefer more technology-integrated 2 BHKs, 3 BHKs, and 4 BHKs with extravagant amenities. In recent times, increase in the number of young professionals to offices will further increase the demand of properties in cities like Mumbai, Hyderabad, Bangalore, Noida and Delhi. Also, property demand will also increase in tier 2 cities like Chandigarh, Indore, Ahmedabad, Lucknow, Varanasi, etc. These cities are going through drastic infrastructure changes.
Reports also state that there will be an increase in the demand for commercial properties. Even though the contribution of the technological sector has declined significantly, the demand for manufacturing, engineering, and flex spaces is set to remain steady. The absorption rate of office properties in the year 2023 is expected to be at 50%, at par or better than the performance figures for 2022.
Square Yards is a technology-enabled, global real estate aggregator and India’s largest player for primary residential real estate. It’s subsidiary Square Capital is one of the largest marketplace for secured mortgages in India. Square Yards platform offers an integrated consumer experience & covers the full real-estate journey from search, discovery to research, transactions, home loans and post-sales service – fully integrating buyers to an extensive network of 500+ partner real estate developers, and 90+ banks & NBFCs. Square Yards is led by accomplished professionals, ex-bankers, and Ivy school alumni and is backed by the competence of more than 2500 employees in 30 cities and ten countries.