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Housing trends that topped the chart in 2022!

28 Dec 2022

The real estate sector in India is all set to end the year on a high note. 2022 has been an incredible year for the real estate sector, particularly the residential segment. The traction witnessed by the industry in the first three quarters of this year suggests that 2022 will, no doubt, set a multiyear high for the industry. There was a robust demand for housing, especially from end-users, across the top cities and tier 2 and 3 cities in India.

Industry reports suggest that the sales of housing units hit a record high. These high sales were aided by a resilient economy and strong consumer sentiment for home ownership. The experience of pandemic experience further fuelled the growth.

Reports state that the sales for the top eight Indian real estate markets were over 2.32 lakh units in the first nine months of CY22. With these numbers, the industry has surpassed the sales witnessed in the pre-pandemic months. The sales recorded in the first 9 months of this year have been, in fact, higher than full-year sales in 2017. Here’s a look at the trends that topped the chart in 2022 in real estate:

Rental demand on a high

2022 saw more companies calling their employees back to the office, or at the very least in the hybrid mode of working. Rental demand for housing and commercial spaces hence rose again after softening considerably during the pandemic. The market demand for rental housing not only breached pre-pandemic levels but also surpassed them.

Affordable housing on the decline, mid-range and premium housing in demand

In 2022, mid-range homes (INR 40 – 80 lakh), premium homes (INR 80 lakh – INR 1.5 Cr), and luxury homes (>INR 1.5 Cr) were in the limelight. Affordable housing, on the other hand, had a lean time. More and more buyers in this segment opted for the wait-and-watch mode, and thus, new supply in this category reduced markedly.

As per industry data, in 2019- the pre-COVID year, affordable housing had been the showstopper. This segment has the highest supply share, with 40% of 2, 36,560 units launched in the top 7 cities. However, in the first nine months of 2022, the supply of affordable housing reduced to 21% of the market share, and approximately 2.65 lakh units were launched in the top 7 cities during this period.

Tier-2 & Tier-3 cities in the spotlight

In 2022, Ahmedabad, Jaipur, Chandigarh, Nashik, Kochi, and Lucknow, were the top favourites by the audience. The comparatively low property prices and improved infrastructure facilities these cities offer made the powerful investment magnets as they staged a strong show in 2022. With decent sales and a number of new launches, many tiers 2 & 3 cities are the new growth engines where a lot of the country’s real estate action will take place in the coming years. Reports suggest that tier 2 & 3 cities are currently the first preference for 25% of property seekers looking to invest in 2023.

Plots in demand

Plotted developments were especially popular in 2022. The southern cities of India, including Bengaluru, Chennai, Pune, and Hyderabad, saw a demand for plotted developments that promote independent living. Plot buyers also look into this segment from a futuristic investment perspective. Experts predict that the superior and safer long-term ROI of land over built-up properties has led to the demand for potted development, which was catered to by many large developers in 2022.

The rise of suburbs

Despite back-to-office situations picking up pace in 2022, the demand for compact homes around workplace hubs in expensive city centres lost more traction. Peripheral locations led homebuyer demand this year, and the suburbs shone as the consumers prefer to choose peripheral/suburban areas where they can buy bigger homes with better lifestyle amenities at lower prices. Industry surveys highlight that only 10% of respondents still chose walk-to-work city centre locations, and only 23% were within the city limits.

This year’s first half witnessed the rise of a period of job security and robust hiring in the IT/ITeS sector. Financial services showed a good hiring graph throughout. Additionally, low home loan rates and a steadily growing homeownership sentiment also helped residential real estate gain and maintain momentum in 2022. With driven demand predicted to continue and interest rates easing, residential real estate is expected to demonstrate strength in the coming year. 2022b has been a fruitful year for real estate all across the country, and we hope that 2023 fuels this growth and momentum. To read more about industry trends and updates, visit https://www.pscl.in/

References:

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