The year 2023 remained a busy year for the real estate sector, and 2024 is expected to be even more busy. It would be interesting to note the trends in 2024 from the perspective of residential and commercial, affordable and luxury, end-user and investor, fractional ownership and REITs, as well as other crucial angles
The realty sector encompassing players from different segments such as residential, commercial, luxury, affordable, etc., presented their views and expectations for the year ahead in 2024. One thing is clear from the views of industry people that there is a high expectation from the realty sector in terms of growth and innovation. Anything closer to their expectation would mean the entire realty sector could witness an exponential growth during the year. So, let’s find out the top trends that will shape the realty sector story in 2024.
Trend 1: Commercial realty and the Office market to witness a consistent upsurge in demand
The office market has been exploring newer ways to improve absorption and it is consistently thriving for innovation and expansion.
Badal Yagnik, CEO, Colliers India, says “2024 is expected to be the year of consolidation upon strong foundations, reflecting stability in India’s office market. Occupier needs will continue to evolve and market offerings will continuously realign themselves. Strong growth prospects in the Indian economy and a healthy domestic outlook will keep occupier as well as developer confidence intact. Demand-supply equilibrium will keep vacancy levels rangebound lending room for rental upside”.
“Backed by rising capital investments, manufacturing output and supportive government policies, the industrial & warehousing sector is expected to grow from strength to strength in India. Going forward, AI and IoT enabled monitoring and proliferation of smart & automated warehouses will redefine the industrial & amp; warehousing sector”, adds Yagnik.
Experts expect the flex segment to lease more than 1.5 Lac seats and beat the 1.45 Lac level achieved in 2023. The flex demand is connected to better employee experience and it’s now a part of the occupier strategies.
Trends to look forward to in 2024 in the commercial realty
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Note: Information provided by Colliers India
Trend 2: Residential realty to witness new launches and growth despite general election in 2024
The General Election will be held in the first half of 2024. It can impact the policies as well as the market sentiment. The supply in residential realty depends on several factors such as including labour, price availability of input materials, etc. Also, with an interim budget due to elections, there won’t be big surprises in the first half of the year for the realty sector.
“We expect the residential market to remain buoyant and ride the next wave of growth and expansion with a good response from buyers in the mid and premium segment. Demand for residential apartments to be backed by a robust supply pipeline with many branded developers having announced new launches and their entry into newer markets. Launches will continue to be strong in 2024, with an estimated range of 280,000-290,000 units”, explains Siva Krishnan, senior managing director, Chennai & Coimbatore, head of residential, India, JLL.
Trends to look forward in residential realty in 2024
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Note: Data provided by JLL; Includes only apartments and for top-7 cities of India. Row houses, Villas, and Plotted developments are excluded from our analysis. Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai.
Trend 3: Share of luxury housing may increase; demand for second homes may continue
The luxury segment usually remains undeterred to some extent due to changes in factors such as interest rates or price fluctuation. However, their buying preferences keep on evolving continuously. Buying preferences of luxury home buyers may witness some change in 2024 as well.
Sharing a view on the luxury segment Badal Yagnik says, “Premium developments of reputed developers are likely to see technology playing a key role in delivering personalised services that improve comfort. Advanced technologies like AI and chatbots will be used for services like virtual concierge services, biometric authentication, higher security and thus provide an upscale living experience. Demand for second homes, vacation homes and plotted developments is likely to remain unabated in 2024. A perceptible increase in the share of luxury housing in overall residential market sales is on the cards for 2024”.
Trend 4: Affordable housing to get greater innovation for better experience
Experts point out that technological advancements such as home automation using gadgets and AI tools have transformed the growth in the realty sector. In 2024, realty growth is expected to gather momentum because of greater acceptance of innovation and technology.
Samyak Jain, director, Siddha Group, says, “The increasing aspiration among homebuyers for luxurious living with amenities and unique experiences reflects a broader shift in lifestyle preferences and expectations. Looking ahead to 2024, we see homebuyers in the mid-segment of housing aspiring to a better lifestyle. They are looking at homes that are luxury in nature yet come at an affordable price point and at a centrally located, well-connected property.”
Trend 5: Top-7 cities to continue growth momentum
The residential market is driven by demand that comes from the end-users. So, the market needs to create a more and more conducive environment for thriving greater end-user demand.
“ICRA expects the area sold in the top seven cities in India to grow by 13-15% in FY2024 and by 10-11% in FY2025, driven by the continued strong end-user demand and healthy albeit moderating affordability. The launches are at a decadal high in FY2024 (higher 15% YOY) and are likely to increase by 9-10% in FY2025. Consequently, the replacement ratio is estimated to inch to slightly above one time in FY2024 & FY2025. The increased preference from home buyers for larger spaces is expected to continue. This has resulted in a change in the overall segment-wise composition with the rising share of the mid and luxury segments to the overall sales across the top seven cities”, says Anupama Reddy, co-group head & vice-president, corporate ratings, ICRA.
Other trends that may unfold in 2024
Apart from the above-mentioned trends, there will be a focus on the other crucial actions as well that may impact the sector’s performance. Interest rates on home loans will be followed keenly by the homebuyers as well as developers in 2024. The impact of inflation on input materials used in the construction sector will influence the pricing of the residential as well as commercial realty sectors. However, the industry expectation currently shows that it is ready to deter all the obstacles in 2024 and achieve growth bettering its 2023 performance.
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Amit Sethi is an accomplished professional with a distinguished background, holding an MBA in Finance. As an Independent Journalist and Data Provider with 20 years of invaluable experience, his expertise lies in meticulously covering stories on Real Estate, Personal Finance, Business and Banking. He writes journalistic content for leading media publications in India and also provides analytical data to real estate and fintech companies. Amit is driven by a purpose to disseminate insightful narratives, using verified information to empower individuals with financial literacy. Through his work, he aims to assist people in staying aware and making informed decisions that positively impact their financial well-being. Amit is a fitness freak, a marathoner and likes trekking.
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