Over the last 2-3 years, the housing market has seen an uptick in demand across the tier I and II cities of the country and developers are optimistic that the momentum is likely to continue in 2024. As per the Developer Sentiment Survey conducted by CREDAI and Colliers, during April-May 2024, about half of the surveyed developers are confident of buoyant residential demand in 2024. Amidst strong demand, about 52% of the developers pan India expect housing prices to rise in 2024. During 2023, average housing prices across the eight major cities of the country saw a 9% YoY rise. The trend persisted in Q1 2024 with a 10% YoY rise and is likely to continue for the rest of the year, albeit at a steady softer pace.
Boman Irani, President, CREDAI, shares his remarks “India’s ambition to become a USD 7 trillion economy by 2030 is driven by the transformative power and multiplier effect of infrastructure and real estate. This has also been validated in the past few quarters with Real Estate’s robust growth and volume of transactions being reflected in the strong QoQ GDP growth numbers clocked by the Indian economy. As we approach the 2024-25 financial budget, the “Real Estate Developers’ Sentiment Survey 2024” comprehensively leverages the strong network of developer members of CREDAI and encapsulates their insightful perspectives to potentially enhance the conduciveness of the current real estate eco-system in India, and cohesively build towards the collective vision of ‘Viksit Bharat’. The survey suggests that the current developer sentiment remains largely positive with more than half of the respondents feeling bullish about the sustenance of the current market dynamics in 2024. However, tackling rising construction costs and rationalization of taxes remain key expectations from the new Government, with more than 50% of Developers seeking constructive solutions for the same.”
The report Real Estate Developers’ Sentiment Survey 2024 presents developers’ assessment regarding the performance of residential segment in 2023 and the likely trajectory of the housing market in 2024. Responses from over 550 respondents from 18 states across India were compiled and analyzed using stratified sampling method.
Key survey results –
| 53% of the developers feel that buyer enquiries and engagement increased in 2023 compared to 2022 |
| 45% of the developers saw a 10-20% rise in construction costs in 2023 amidst rising input costs |
| About half of the developers feel that residential demand would remain stable in 2024, followed by 27% who feel that the demand would increase by up to 25% |
| 52% of the surveyed developers expect housing prices to increase in 2024 |
| 25% of the developers are willing to explore plotted developments as an alternative business model, followed by branded residences which were preferred by 21% developers |
| More than 80% developers believe that NRI demand for residential properties will increase |
| Almost 50% of the developers wish for significant reduction in costs either through tax rationalization or decrease in interest rates |
Source: Colliers, CREDAI
“With over 50% of surveyed developers witnessing a rise in homebuyer enquiries, residential real estate has been on an upswing throughout 2023. This strong streak is expected to continue in 2024 largely led by stable interest rates, continued inclination for home ownership and positive market sentiment. Going ahead, developers anticipate a rise in housing prices, which reflects their confidence in the residential market. With significant new launches over the last two years, unsold inventory levels have expanded; thus launches are expected to moderate in the near-midterm. Developers are likely to carefully monitor the market trends and be more strategic while launching new projects.” said Badal Yagnik, Chief Executive Officer, Colliers India
Plotted developments and branded residences on developers’ cards
With evolving demand trends and lifestyle patterns, about 66% developers are keen to explore alternate business segments like plotted developments, branded residences, senior living etc. Factors such as privacy, green spaces and spacious dwellings have accelerated demand for plotted developments in urban areas, especially in tier II cities. Furthermore, branded residences are picking up pace across the tier I cities of the country led by increased affinity for unique living experiences, aesthetics, and luxurious amenities. Interestingly, about 30% of the developers are willing to explore and diversify into other asset classes including developments like warehousing/logistics parks and data centers.
Developers positive about NRI demand for housing
Over 80% of the surveyed developers are confident of an increase in housing demand from NRIs during 2024, led by the country’s attractive investment landscape, a favorable regulatory environment and potential for investment gains. To cater to this growing demand, developers are likely to launch upscale residential projects in relevant micro-markets across cities.
Tax rationalization, sops for affordable housing, single window clearance are the major expectations of developers
As per the survey, majority of the developers expect tax rationalization, sops for affordable housing and single window clearance from Budget 2024. Furthermore, GST related input tax concession and interest rate reduction could provide financial elbowroom to developers and improve financial viability of projects. Moreover, about 30% developers expect improvements in ‘Ease of doing business’, facilitated by an improved regulatory framework, supportive government policies and streamlined approvals. Such all-encompassing measures can further improve the investment landscape of the country and the housing demand.
