The Indian real estate market is set for ongoing expansion this year due to persistent housing demand, according to Boman Irani, the president of the Confederation of Real Estate Developers’ Associations of India (CREDAI). In a recent industry forecast, Irani highlighted the sector’s robustness and anticipated that property values would increase at a rate surpassing inflation, fueled by consistent demand and positive market circumstances.
Driven by economic revival and rising ambitions among homebuyers, India’s real estate market has witnessed a significant rebound over recent years. Despite worldwide economic fluctuations, the industry has stayed a fundamental element of the nation’s economic expansion, with housing playing a crucial role. Irani’s positive outlook indicates faith in the housing market’s potential both in the immediate and distant future, backed by beneficial demographics, growing urbanization, and policy initiatives that have enhanced trust among both developers and purchasers.
A consistent increase in housing demand
The appetite for residential properties has been climbing steadily, driven by a variety of elements. A major catalyst has been the change in consumer priorities due to the pandemic. With remote work becoming more prevalent and individuals spending increased time at home, the significance of having a comfortable and safe living environment became paramount. This transformation has resulted in a heightened interest in homes, especially those providing more spacious areas, improved amenities, and proximity to green spaces.
Furthermore, Irani pointed out that the low-interest rates on home loans have been vital in maintaining demand. In recent years, affordable financing has made owning a home within reach for a wider range of people. Even with the recent minor upticks in interest rates, the demand has persisted, showcasing the continued robust need for housing across different income brackets.
Additionally, Irani noted that low-interest rates on home loans have played a crucial role in sustaining demand. Over the past few years, affordable financing options have made homeownership more accessible to a broader segment of the population. Even as interest rates have seen slight increases recently, the momentum in demand has remained intact, reflecting the strong underlying need for housing across various income groups.
Property values expected to exceed inflation
Price growth set to surpass inflation
Materials like steel, cement, and other building essentials have experienced price hikes recently, compelling developers to revise property prices to sustain profit margins. Moreover, regulatory shifts and compliance obligations have increased project expenses, contributing to the overall rise in residential unit pricing.
Simultaneously, the demand-supply imbalance in specific urban areas has fostered an environment for price growth. Prime spots in major cities and expanding Tier 2 and Tier 3 cities have seen increased demand, with a shortage of inventory in some regions. This has led to elevated property values, especially for projects targeting mid- and high-income groups.
Irani highlighted that despite the increase, prices are still reasonable when compared to global standards. He stressed that the industry’s aim continues to be achieving sustainable growth that advantages both developers and homebuyers, ensuring that housing remains a compelling investment choice.
Government measures boosting confidence
Government policy measures and reforms implemented in recent years have been crucial in forming the optimistic perspective for the real estate industry. Actions like the Real Estate (Regulation and Development) Act (RERA), the introduction of the Goods and Services Tax (GST), and incentives for affordable housing have improved transparency, simplified procedures, and reinstated confidence in the market.
Policy measures and reforms introduced by the government over the past few years have played a vital role in shaping the positive outlook for the real estate sector. Initiatives such as the Real Estate (Regulation and Development) Act (RERA), the implementation of the Goods and Services Tax (GST), and incentives for affordable housing have enhanced transparency, streamlined processes, and restored trust in the market.
RERA, in particular, has been a game-changer for the industry. By mandating greater accountability and ensuring timely project deliveries, the act has instilled confidence among homebuyers, which has translated into stronger demand. Developers, too, have benefited from the improved regulatory framework, as it has helped create a level playing field and fostered a more organized market.
Forecast for 2025 and the future
Looking forward, Irani conveyed confidence in the trajectory of Indian real estate, emphasizing the industry’s capacity to adjust to evolving market conditions and consumer needs. He remarked that prioritizing sustainability, technology, and innovation will be pivotal in propelling growth in the upcoming years.
Sustainability has notably become an essential factor for both developers and purchasers. With heightened awareness of environmental issues, the demand for eco-friendly buildings and energy-efficient residences is rising. Developers are addressing this trend by integrating sustainable methods into their projects, appealing to environmentally aware buyers and cutting long-term operational costs.
Technology is also driving substantial change in the real estate industry. With the advent of digital marketing, virtual property tours, and the application of artificial intelligence in design and construction, technology is boosting efficiency and enhancing the overall customer experience. Irani stressed that adopting technological innovations will be crucial for developers to remain competitive and satisfy the changing demands of today’s homebuyers.
Although the outlook is positive, Irani recognized that challenges persist. The sector still faces difficulties such as prolonged approval procedures, regulatory obstacles, and restricted access to affordable urban land. Overcoming these issues will necessitate cooperation among developers, policymakers, and other stakeholders to establish an environment conducive to sustainable growth.
An encouraging future for homebuyers and investors
A promising future for homebuyers and investors
For potential homebuyers and investors, the current market dynamics present a promising opportunity. With demand expected to remain strong and prices projected to grow steadily, real estate continues to be an attractive investment avenue. Irani highlighted that property remains one of the most reliable assets for wealth creation and long-term financial security, particularly in a market as dynamic as India’s.
In conclusion, the Indian real estate sector is on a robust growth trajectory, driven by sustained demand, favorable policies, and evolving consumer preferences. As housing prices rise in tandem with inflation, the market presents a unique opportunity for buyers and developers alike. With continued focus on innovation, sustainability, and collaboration, the real estate industry is well-positioned to play a pivotal role in India’s economic development in 2025 and beyond.
