2024-07-12 20:38:51
New DelhiAfter the Corona period, there has been a big boom in the real estate market of the country. During this time, the demand for houses has increased not only in metro cities but in almost every city of the country. Due to this, the prices of houses have also increased. Due to this, new launches of projects are also happening a lot. But this sector is currently facing many tax burdens. The real estate industry says that the government should take some such measures in the upcoming budget so that the tax in this sector can be rational.
Rise in demand for houses
In the last 2-3 years, there has been a surge in demand for residential property in Tier I and Tier II cities of the country. Developers expect this momentum to continue in 2024 as well. According to the Developer Sentiment Survey conducted by CREDAI and Colliers during April-May 2024, almost half of the developers surveyed are confident of a boom in residential demand in 2024. Amid strong demand, about 52% of developers across India expect housing prices to rise in 2024. During 2023, housing prices in the country’s eight major cities have seen an average annual increase of 9%. This trend continued in the first quarter of 2024 with 10% annual growth and is likely to continue to rise in the rest of the year, although this growth will not be very fast but will remain stable.
Strong growth but…
Boman Irani, President, CREDAI said, “India’s ambition to become a USD 7 trillion economy by 2030 is driven by the revolutionary power and impact of infrastructure and real estate. The robust growth of the real estate sector over the last few quarters and the increase in volumes of transactions in this sector have also been reflected in the strong quarterly GDP growth recorded by the Indian economy. We are now approaching the financial budget of 2024-25. The “Real Estate Developers Sentiment Survey 2024” benefits greatly from the strong network of CREDAI developer members. The index captures their insightful perspectives to improve the state of the current real estate eco-system in India and take decisions unitedly towards the collective goal of a ‘Developed India’. The survey shows that current developer sentiment remains largely positive. More than half of the developers surveyed expect the current market boom to continue in 2024. However, developers need support from the new government to deal with rising construction costs and to provide more flexibility to developers. There is hope for rationalisation of taxes. More than 50% of developers want a positive solution for this.”
Developers should be cautious while launching new projects
Badal Yagnik, Chief Executive Officer, Colliers India, said, “More than 50% of the developers surveyed reported an increase in homebuyer inquiries. Residential real estate is expected to see a boom in 2023. This upward trend is expected to continue in 2024 as well, driven by stable interest rates, continued interest for home ownership and positive market sentiment. Developers expect further home prices to rise. This reflects their confidence in the residential market. The large new launches in the last two years have led to high levels of unsold inventory. Launches are expected to moderate in the near to medium term. Developers are likely to carefully monitor market trends and be more cautious while launching new projects.”
What came out in the survey
53% of developers expect an increase in purchase inquiries and related activity in 2023 compared to 2022
Amid rising input costs, 45% developers say construction costs will increase by 10-20% in 2023
Nearly half of developers expect residential demand to remain stable in 2024, while 27% expect demand to grow by up to 25%
52% of developers surveyed expect housing prices to rise in 2024
25% of developers are willing to explore plotted development as an alternative business model, followed by branded housing segment which is preferred by 21% of developers for their alternative business
Over 80% of developers believe NRI demand for residential properties will increase
Nearly 50 per cent of developers want major cost reductions through simplification of tax regime or reduction in interest rates