Indian Residential Real Estate Market Flourishes Under Modi's Reforms: Anarock-Naredco Report
The Indian residential real estate sector has experienced a major transformation fueled by key reforms introduced by the Modi-led government, as revealed in a new report titled "Real Estate Unboxed: The Modi Effect," jointly released by Anarock and Naredco.
The report sheds light on the sector's journey over the past decade, highlighting significant growth and the emergence of new opportunities.
Anuj Puri, Chairman of Anarock Group, emphasised the sector's thriving performance, particularly in the top 7 cities, over the last decade. The report indicates a substantial surge in housing demand and supply, with approximately 28.27 lakh units sold between 2014 and 2023. Cumulative new launches exceeded 29.32 lakh units during the same period, showcasing robust growth in the sector. Average housing prices in these cities witnessed significant demand-led appreciation, ranging from 25 per cent to 60 per cent.
Economic Impetus And Market Outlook
Niranjan Hiranandani, Chairman of Naredco, underscored the profound impact of government reforms on the real estate sector. He highlighted India's impressive economic growth, propelling the country to the 5th position on the global economic performance ladder. With projections indicating a market size of USD 1 trillion by 2030, the sector is poised to contribute 13 per cent to India's GDP by 2025, signalling its pivotal role in driving economic development and employment.
Drop In Housing Inventory Overhang
The report also noted a significant decline in housing inventory overhang over the past decade. The pan-India housing inventory overhang reduced from 41 months in 2017 to 15 months by the end of 2023, indicating improved market dynamics. Despite challenges posed by the Covid-19 pandemic in 2020, the sector displayed resilience, with available inventory levels demonstrating positive trends.
Accelerated Completion Of Units
Data highlighted in the report indicates a substantial increase in the completion of residential units, especially post-pandemic. Notably, there was a 44 per cent rise in unit completions in 2022 compared to 2021, showcasing the sector's resilience amid adverse conditions. It is estimated that over 5.31 lakh units will be completed in the top 7 cities by 2024, indicating sustained momentum in construction activity.
Impact of Government Reforms
The report credits game-changing reforms such as the Real Estate (Regulation and Development) Act (RERA) and the SWAMIH alternative investment fund for revitalising the sector. RERA, implemented since 2017, brought transparency and accountability to the sector, ensuring timely project completion and protecting home buyers' interests. The SWAMIH Fund, established in 2019, has played a crucial role in addressing liquidity issues and supporting stalled affordable housing projects.
Technological Advancements And Future Prospects
Technological advancements, including the adoption of PropTech solutions, have further streamlined processes and enhanced efficiency in the real estate sector. With PropTech startups accounting for 6 per cent of India's total recognized startup universe, the sector is poised for further innovation and growth. Looking ahead, the real estate industry is expected to realign its strategies to capitalise on economic opportunities and reinforce its contribution to India's growth story.
The Anarock-Naredco report paints a picture of a resilient and dynamic real estate sector poised for continued growth, driven by policy support, technological innovation, and market dynamics.
