Real Estate Market To See Robust Growth In 2023 Real estate is a viable alternative due to the persistent fragility of financial assets other than the stock market
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Post pandemic, there has been a steep rise in housing demand with renewed interest and perspective of the homebuyers toward real estate. According to reports, India's real estate market—both residential and commercial—is forecasted to cross INR 13 lakh crore by 2023. Key influencing elements comprising rising population, wealth growth and rapid urbanization are the key contributors to this growth. The commercial sector too has taken to the forefront for driving the growth of real-estate industry. Factors including the expansion of commercial operations in the new normal, improvisation of the labour market and rising income levels are key drivers of demand for the sector.
What will drive the real estate market growth in 2023?
Increased demand for bigger living spaces: The preferential evolution of homebuyers has phenomenally redefined the way homes are perceived. People are looking to upgrade to bigger living spaces as COVID changed the way we lived and worked overall. This trend is expected to prevail in 2023. Since the start of the epidemic, real estate and residential assets have grown in prominence. The current surge in demand in the luxury industry reflects a strong consumer mindset that prioritises the areas of life-related to experiences.
Strong demand for homeownership due to higher consumer sentiment: The easing out of pent-up demand along with a strong interest of millenials in Indian real estate are all contributing to an upbeat sentiment towards homeownership. The coming year will see further strengthening of this trend with the rising income level and realization of real estate as a reliable asset class.
Increased interest shown by the NRIs and HNIs: The rise of dollar against Indian rupee along with favourable investment opportunities have drawn the NRIs interest towards Indian real estate. Rich Indian consumers today are eager to spend money on luxury properties across the country, preferably in their hometown to establish or sustain the emotional connect with their home country.
Going forward, NRI investments are likely to keep flowing in and make up a sizeable portion of the market for luxury residential and prime commercial properties with metros such as Bangalore, Hyderabad and Mumbai being the most sought after destinations.
High demand for leasing space: There will be a rise in the demand for space to lease, especially from IT, and retail companies. Large tech companies have already committed to expensive office leases. Warehousing will continue to receive financial support from e-commerce and third-party logistic companies, making it one of the fastest-growing commercial real estate industries. Additionally, data centre investments will increase that will add to the surging demand, creating commercial properties as strong asset-class.
Conclusion
Real estate is a viable alternative due to the persistent fragility of financial assets other than the stock market. In the year FY23 the sector will be an intriguing investment opportunity for investors with a long-term horizon and it is expected that the growth will be positive in terms of quantity and quality.
