Amidst anticipation surrounding the General Elections, the Indian residential real estate market is poised for another potential peak in 2024. With regulatory reforms firmly in place and optimistic GDP growth forecasts by international organizations like the IMF, the stage is set for significant growth in the housing sector.
Election Years as Growth Drivers: Historically, election years such as 2014 and 2019 witnessed notable growth in housing sales compared to previous years. In both instances, decisive election outcomes instilled confidence among homebuyers, leading to increased purchasing activity.
Developer Confidence and Expansion: Fueled by robust homebuyer demand, developers have been engaging in substantial land deals, buoyed by clean balance sheets. Many reputable developers with strong financial standings are now exploring new markets to expand their footprint, further stimulating growth in the sector.
Past Performance: In 2014, the housing market reached its pinnacle with approximately 3.45 lakh units sold and 5.45 lakh new units launched across the top 7 cities. Similarly, 2019 saw significant activity with around 2.61 lakh units sold and 2.37 lakh units launched in the same cities.
Price Trends Analysis: Analyzing price trends reveals that 2014 witnessed stronger growth compared to 2019. Average prices in the top 7 cities rose by over 6% annually in 2014, while the increase was more modest at 1% in 2019.
Challenges and Revival: The residential real estate sector experienced a slowdown between 2016 and 2019 due to policy reforms and the NBFC crisis. However, signs of revival emerged post-2019, only to be momentarily dampened by the pandemic in early 2020. Nevertheless, the market rebounded strongly from 2021 onwards, signaling renewed momentum.
Outlook for 2024: Experts are optimistic about the residential market’s prospects in 2024, citing favorable conditions and sustained momentum. With all indicators pointing towards continued growth, the year could potentially witness another peak in housing sales and new launches.
Conclusion: The Indian housing market stands at a crucial juncture, poised for significant growth in 2024 amidst the backdrop of the General Elections. With regulatory stability, developer confidence, and strong homebuyer demand, the stage is set for another peak year in residential real estate.
