The real estate market recovered steadily in 2022 with growing residential and commercial demand which was complemented by the gradual reopening of offices and educational institutions. As compared to India Bengaluru had the strongest growth story where we have seen a noticeable increase in demand, supply, prices, and rents.
Convening at the flagship Magicbricks Leadership Dialogues, real-estate experts from Bengaluru shared an optimistic outlook for 2023, driven primarily by economic stability and a strong end-user residential demand. Industry stalwarts like, Ramani Sastri, Chairman and Managing Director of Sterling Developers, G Madhusudhan, CMD at Sumadhura Infracon Pvt. Ltd., and Kishore Jain, Managing Director Jain Heights were present, at this event. The session was chaired by Siddhart Goel, Head – Research & Editorial, Magicbricks.
The session discussed the growth in demand post-2020; according to Magicbricks’ data, the residential demand in Bengaluru increased 32.9% in 2022 whilst supply increased 8.4% and prices increased by 7.5%. On the reason for the increased demand, Ramani Sastri said, “There are some significant changes in the profile of homebuyers. You can also see a shift in first-time homebuyers from those who were typically in their mid-40s to those between 28 and 42. These buyers are more open to taking mortgages as they are confident of repaying them, and in fact, they are even confident about closing them well within the loan tenure of 20 years. A major reason for this confidence is that many homebuyers saw a substantial increase in their savings, which allowed them to save for their down payments. Further, many parents and grandparents are today providing funds to their children/grandchildren to make the down payments as they also have savings. This has also resulted in many homebuyers opting for lower loan-to-value ratios (LTV) despite them being eligible for loans of up to 80% of the property price.”
Kishore Jain, MD, Jain Heights, and Structures Pvt Ltd. commented, “In the year 2016, we saw a lot of financial changes to the country such as demonetisation, GST, RERA, and others. At that time, there was more demand for rental property than ownership. However, the year 2020 was a turning point as it changed people’s mindsets. Owning a house provides more security and stability to them. And I expect the market share of real estate to grow in leaps and bounds in the coming years.”
Echoing sentiments about the growth of Indian real estate post-2020, G Madhusudhan, CMD, Sumadhura Infracon Pvt Ltd. said, “2022 was the recovery year for India as we have seen huge demand post COVID-19.” Further, discussing the global recession and if it will have any impact on the Indian market and real estate, along with the change in people’s buying choices he said, “India will indirectly benefit from the layoffs happening in the western market, as more focus will be on outsourcing activities to low-cost labour countries such as ours. Based on this, Indian users will have more money to purchase real estate. Earlier there was demand only for residential. However, now we are seeing huge demand in commercial offices, warehousing, vacation housing, senior living, and student housing. As far as the growth potential of India is concerned, the next decade is of India, out of which real estate will make a major contribution.”
The industry experts also concurred that the high real estate demand witnessed in Tier 2 and Tier 3 cities during Covid-19 is now self-sustaining owing to the efforts of the Central and State governments and that these will continue to grow very fast. Leaders opined that soon there will be a trend of investing in two homes, one in a major city where you work and the other will be in your hometown.
The session concluded with real estate’s positive footprint and high growth potential in decades to come as Siddhart Goel – Head of Research and Editorial said “2022 was largely a recovery year and similar growth is expected in 2023 as well. Demand went up exponentially, which was great news for the real estate industry. Institutions like World Bank, and IMF, large investors have been saying that the growth of India is going to be the highest among all major economies and that this will be sustained over the next many years. Hence, the Indian real estate industry will not only benefit from the high economic growth as demand for various assets will increase but it will also fuel the economic growth itself.”
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