The Indian real estate market is showing strong signs of rebound as the economy continues to recover post the COVID-19 pandemic, according to a report released today, titled ‘The Outlook of the Real Estate Market in India’. Leading valuation and consulting firm RBSA Advisors expects India’s real estate sector to grow at a CAGR of 15% from USD 60 bn in 2010 to USD 1,000 bn by 2030 and contribute 13% of the country’s GDP by 2025.
Indian real estate residential segment (averaging roughly 3-5% of GDP) contributes to 80% of the Real Estate Market. The report said that in H1 of 2021, the impact on residential market traction has been seen more as a speed-bump rather than a major obstruction.
After a prolonged period of falling and then stabilizing, residential prices are likely to start rising again. 5% capital value growth for the residential property segment is expected in the country in 2022.
As things are getting back to normal, residential sales volumes have shown a strong growth of 67% YoY to 99,416 units and the unsold inventory level dipped slightly, by 1% YoY since the H1 2020, to 441,742 units in H1 2021. The Government’s focus on affordable housing is expected to further provide an impetus to this segment.
The organised retail real estate sector is expected to increase by 28% to 82 million sq. ft. by 2023. India registered investments worth USD 2.4 billion into real estate assets, a growth of 52 % YoY in the first half of 2021.
The momentum kept going as the Union Budget 2022 announced an outlay of Rs 20,000 crore for Gati Shakti in infrastructure projects. Rs 48,000 crore for Pradhan Mantri Awas Yojana (PMAY) for urban and rural homes in FY23. It is expected that the real estate market will recover from the shock across the forecast period as it is a ‘black swan’ event (COVID ‘19) and not related to ongoing or fundamental weaknesses in the market or the global economy.