Source: Financial Express(

Driven by policy reforms, positive consumer sentiment, rising disposable income and growing demand for bigger homes, the real estate sector in India has experienced remarkable growth in 2023, surpassing the growth rates of all previous years and breaking all records.

Talking about the spectacular performance of real estate – particularly the residential segment — in 2023, Yashank Wasson, MD, Royal Green Realty, says, “In 2023, the real estate sector experienced a dynamic and resilient performance marked by various trends. The global recovery from the pandemic-induced economic slowdown contributed to increased demand for residential properties, driven by low interest rates and a desire for spacious homes. However, challenges such as rising construction costs and supply chain disruptions impacted the industry’s overall growth.”

The year 2023 also marked a significant milestone for fractional ownership, particularly within the second or holiday home segment.

Luxury Housing Demand In Top Gear

Among the budget categories, luxury housing demand increased exponentially in 2023 as homebuyers continue to look for bigger livable spaces post the pandemic. According to Anarock, the new luxury supply addition across the top 7 cities in 2023 has jumped up five times when compared to 2018.

As per a recent report by CBRE, the premium and luxury housing segment comprising units priced at Rs 2 crore and above maintained strong sales momentum, registering a 70% Y-o-Y increase in the January to September 2023 period and the trend is even more pronounced in certain cities, where the combined share of these categories in overall sales is around 20%.

The industry, in fact, has witnessed an exceptional year in housing sales during 2023, with the demand for luxury and ultra-luxury segments taking center stage.

“The market has experienced a surge with prospective buyers eagerly seeking high-end flats ranging from Rs 2 crore to Rs 100 crore. This unexpected demand has resulted in builders swiftly selling entire projects, with developers employing innovative strategies to manage the overwhelming expressions of interest compared to the available number of flats. While the luxury market has shone brightly, it is important to acknowledge the continued robust activity in the low-cost and mid-income segments, contributing significantly to the overall housing sales growth. As we look forward to the coming year, we anticipate sustained demand, potential price stabilization, and a promising outlook for the entire spectrum of housing segments,” says Aman Sarin, Director & Chief Executive Officer, Anant Raj Limited.

Outlook for 2024

Industry experts anticipate the homebuying sentiment witnessed in 2023 to persist in 2024 also. According to CBRE, demand for projects in the mid-end and budget/affordable category (Rs 45 lakh to Rs 1 crore) is projected to remain strong, aligning with the trends of the past couple of years. Projects in the premium and luxury segments (Rs 2 – Rs 4 crore and above) are also likely to continue experiencing healthy growth.

Amrita Gupta observes, “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 favorable 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.”

Some developers say expectations for the real estate market in 2024 are cautiously optimistic.

The holiday home segment is also expected to do well going ahead.

“The holiday home segment, in particular, presents exciting opportunities for growth in the coming year and we foresee Goa maintaining its spotlight, driven by its unique blend of scenic beauty, cultural richness, and the growing trend of individuals seeking a second home for leisure and relaxation. With a commitment to cutting-edge amenities, the industry is poised to meet the evolving preferences of clientele. The anticipation of government schemes and announcements providing support adds an optimistic note to the sector. As the industry embraces sustainability, it aligns with the collective vision for a robust and progressive real estate landscape.”

Moreover, amid transforming preferences, affordability will no longer be the sole decisive factor for homebuyers as health & safety, community living, sustainability, and integration of smart home technologies have also started to emerge as key factors in home purchase decisions.