Around 74% of developers expect demand to increase or remain stable, reveals the joint CREDAI-Colliers-Liases Foras Real Estate Developers’ Sentiment Survey 2023.
Harsh Vardhan Patodia, President- CREDAI National, said, “The previous year provided the much-needed impetus and led to record-breaking sales in the last decade. Hence, more than 70% of developers believe the demand for home ownership will either increase by 25% or remain stable in 2023. With such sentiment, most of the developers (87%) are looking to expand their offerings and the year is likely to see a surge in new launches equal to the current supply under construction. Rising population, wealth growth and rapid urbanisation are the key influencing factors driving the sector’s growth. Hence, to help maintain the momentum, almost 40% of developers anticipate improved ease of doing business from the government in 2023, while another 31% anticipate rationalization/income tax credit GST.”
Around 58% of developers Pan-India expect prices of houses to further go up in 2023. The price rise can be attributed to robust demand for homes in the Indian market and parallely volatile key input costs. “During 2022, developers across the spectrum saw increased enquiries led by a continued inclination towards home ownership since the pandemic. The survey reveals that developers remain optimistic about the market. About 43% of the developers feel that residential demand would remain stable in 2023. Homebuyers remain enthused about purchasing homes, despite rising interest rates. Developers too are focusing on launching projects that are aligned as per the needs of the homebuyers and are also formulating strategies to complete their pending projects and bring in demand-led supply,” said Ramesh Nair, CEO India and MD, Market Development, Asia, Colliers.
Among the various types of development, branded residences have emerged as a favourite among developers with around 31% of the developers exploring plotted developments as an alternative business model, followed by branded residences which were preferred by 19% of developers. Higher disposable incomes and an increased need for best-in-class amenities and open spaces have pushed up demand for self-contained residential complexes. Tier-II cities are seeing increasingly more plotted developments due to lower land rates and the flexibility they offer to homebuyers.
Next year is likely to see a spurt in new launches, as around 87% of the developers are willing to launch new residential projects in 2023. This cements the optimism among developers despite inflationary pressures and any potential slowdown.
“2022 witnessed the highest-ever sales and new launches across major cities in India. We have also seen a marginal increase in property prices. The market is likely to maintain the momentum that the sentiment survey re-affirms”, said Pankaj Kapoor, MD, Liases Foras. However, the survey also mentions that developers are likely to adopt a wait-and-watch approach to see how the economy, job freezes, and layoffs pan out over the next few months.Â