After reaching the nadir in mid 2020 following the Covid-19 Pandemic and stringent lockdowns, the country s real estate sector bounced back in 2022 despite global uncertainties. Unsell inventory in the housing market is declining fast as demand for residential homes continues to remain steady, according to data from leading industry researchers.
The investors have confidence in the local market because of the steady inflow of private equity PE investments in the commercial sector. Since the Covid-19 epidemic hit shores, un sold inventory in the affordable housing market has shrunk by nearly 21 per cent, according to Anarock Property Consultants.
The number of unselling units that were available for homebuyers has fallen to 186,150 units by March this year, from 234,600 un sold units at the end of March, 2020. According to Anuj Puri, Chairman, Anarock Group, this is the highest supply reduction among all budget categories, reflecting an enduring demand for affordable homes. The ultraluxury homes priced above Rs 2.5 crores also fared well, reporting a 5.4 per cent decline in supply across the top seven cities in the last year. This is despite the addition of significant new supply to address the surge in demand for ultraluxury homes in the pandemic. Mumbai and Kolkata saw the highest inventory reduction of 16 per cent and 15 per cent.
Realtors are in agreement. Leading players like Signature Global, Hiranandani Group, Gulshan Group and Raheja Developers have seen a surge in demand for residential homes for the past few quarters.
Niranjan Hiranandani, co-founder of Hiranandani Group and vice chairman of the National Real Estate Development Council NAREDCO, said that the residential market is finally getting its mojo after suffering from subdued demand for nearly a decade. He believes that the trend will continue despite rising costs.
The Covid pandemic and the work from home culture arrived as a blessing in disguise for the industry. The people know that they need their own homes, which is a safe haven for a person during uncertain times, unlike a rented apartment. This pushed the fence-sitters into the market. We're witnessing record demand for affordable homes and larger units and builder floors Pradeep Aggarwal, founder and chairman of Signature Global and Chairman of the ASSOCHAM National Council on Real Estate, Housing Urban Development, told Business Today.
Nayan Raheja, director at Delhi-based Raheja Developers, said demand for luxury homes is encoring them to launch new projects in Gurugram in 2022.
In 2021, some $2.9 billion worth of PE funds reached the office space market, up from $2.5 billion in the same year a year ago, according to Knight Frank. It jumped by 271 per cent to 817 million from $220 million in 2020 in the retail market.
PE investments in the residential segment tripled to $1.2 billion last year, from $368 million, because of the surge in demand for homes.
The influence of omicron in the early part of the year and the Russia-Ukraine war have hindered investment, which is why investors appetite was strong across various real estate asset classes in 2021. Shishir Baijal, chairman of Knight Frank India, said the move forward will be for infrastructure spending to accelerate investments in the next three quarters of the year 2022 to levels previously seen prior to the Pandemic.