The Indian real estate sector is adjusting to the changes brought by the coronavirus, but what are the major trends to look out for this year?

After surviving two years marred by the pandemic, the Indian economy is finally showing some recovery signs. Most economic indicators have either surpassed the pre-pandemic standards or are reaching close to them.

The nation’s central bank estimates a GDP growth of 9.5% for the financial year 2022-23 compared to the low base of the old year. And the real estate sector is nowhere left behind; instead, it is adding to benefits with an upsurge in real estate activities- majorly residential, office, retail, warehousing, etc., garnering the closest attention.

Indian real estate market analysis

The Indian real estate market is estimated to witness a growth of 9% in the period 2023-28.

• In India, real estate is the second most reliable employment generator post agriculture. Thus, this segment is expected to create higher NRI investment, both for now and in the long run. Chennai and Bengaluru are NRIs’ most preferred property investment options, trailed by Goa, Ahmedabad, Delhi, and Pune.
• There has been a splurge in demand for residential properties because of growing urbanization and rising family income.
• In the first quarter of 2022, the leasing amount of the best office markets of India was 11.55 million sq. ft., And from July 2021 to September 2021, there was a sale of 55,907 housing units amongst the eight top cities of India.

Considering these market analysis, here are the top trends to expect in 2023:

1. The residential market is on a spree

Following a sustained period of decline and stabilization, residential prices are expected to rise again. The projection for the residential property segment in the country in 2022 is around 5% capital value growth. Many supply and demand-side factors evaluated over the last decade have begun to exert upward pressure on house prices.

Furthermore, residential sales momentum is anticipated to persist in 2022 as potential homebuyers seek larger homes, better amenities, and attractive pricing to seal deals.

2. Office spaces have set high records in the Information Technology sector

The office market will witness a rise because of the consistent drive of IT sector leasing. Depending on recruitments of the last 18 months, it is estimated that the best IT companies’ increment demand for office spaces will be around 1 million sq. m. in the coming time.

3. Co-working spaces will support flexible working

In the uncertain times of the pandemic, businesses wish to retain the flexible working model. At this time, the co-working sector will avail of as the pandemic forces the need for agility. Agility has always been linked to the co-working segment, which is known to force the demand for flexible office spaces even after things have returned to normalcy.

4. Ecommerce businesses have added to the warehousing industry

Ecommerce businesses will prompt the growth of the warehousing segment, with its share in the warehousing sector rising to 36% in 2023 from 31% in 2021. Overall, warehousing transactions are estimated to rise at a CAGR of 20% in 2023. Hence, speed and technology will further emerge as significant considerations for those strategizing warehousing.

5. Digital consumption and policy prompt data center demand

With the release of 5G and data localization regulations, the need for data storage near users has gained importance. Thus, the country needs to scale its data center capacity to meet the needs of its user base.

Given a good volume already under construction, IT capacity is expected to rise to 735 MW by the year’s end.

By 2030, the real estate sector in India is estimated to surpass USD 1 trillion in the market, and retail, hospitality, and commercial sectors will be the real drivers.

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