India’s property market maintains a positive outlook in the second half of 2023. The growth in consumption across segments is also mirrored in the property markets, which sustained their upward trend in the first half of the year. The primary residential market in the top-eight cities witnessed double-digit growth, with both new supply and sales in H1 2023 recording a year-on-year increase of 44 per cent and 15 per cent, respectively.
The much-awaited upcycle in the property market is evident with the increase in the credit growth in housing, which clocked double-digit growth as a factor of the pent-up demand and also a revived interest in the property market as a lucrative investment option. The buoyant consumption patterns and improved sentiments amid the inflationary pressure indicate an overall optimistic approach amongst homebuyers for the coming six months, as is also highlighted in our latest consumer sentiment survey.
The findings suggest that the consumer economic outlook remains positive, with the respondents also expressing optimism regarding their future earnings, a component that bodes well for the property market. The trends also suggest that homebuyers, mainly end-users, are looking for budget-friendly properties which are nearing completion or are in the ready-to-move-in category. Amenity-rich gated communities have emerged as a preferred choice for the aspirational and upwardly mobile homebuyers who participated in the survey from across the top 8 cities.
It is evident from various data sets that more and more buyers are searching for homes, and there is an underlying demand for home ownership that has significantly surged during the pandemic. Our IRIS index, a leading indicator to gauge upcoming demand in key cities of India, also highlights the demand surge and is steadily above the 100-mark. However, amidst this positive sentiment, finding the right product at the right price points remains a key challenge for buyers.
In a nutshell, India's property market exhibits robust growth and optimistic trends in the second half of 2023. The double-digit expansion in the primary residential market, coupled with a significant increase in housing credit, signals a pronounced upcycle. Consumer sentiment, as reflected in our survey, adds to the positive narrative, highlighting a favorable economic outlook and heightened interest in real estate. While challenges persist, including the need to align products with price points, the sustained surge in demand for homeownership, as indicated by the IRIS index, underscores a promising trajectory. With strategic adaptation, the property market appears poised for continued resilience and growth.
