Luxury Living Soars: Unveiling the Phenomenal Growth in India’s Real Estate Sector in 2023
The year 2023 has been one of the most crucial years for the Indian economy, as the nation entered the ranks of the largest economies in the world. Emerging as the fastest-growing economy in the world, the country’s economic and political prowess has indeed led to 2023 being dubbed its global year. This feat was, however, attainable in no small part due to the country’s robust real estate sector.
The Indian real estate sector, worth $477 billion, contributes approximately 7.3% to the country’s GDP, a share that is poised to increase to 15.5% by 2047. Therefore, as we bid adieu to this year, it is crucial to conduct a comprehensive review of the real estate sector in 2023 to understand the trends that characterised this year. To say 2023 was a groundbreaking year for the Indian real estate sector would be an understatement, with the luxury segment leading the way.
In fact, in the first half of 2023 itself, the sale of luxury homes increased by 130% as compared to the same period in the previous year. According to industry studies, more than 60 high-value transactions (>Rs 40 crore) took place in 2023, as opposed to 13 in 2022. Not only that, sales of properties worth over 1 crore more than doubled this year vis-à-vis the previous year.
Some reasons for the popularity of luxury housing in India are:
Shifting Buyer Preferences
In recent years, there has been a shift of significant magnitude in the buying preferences of Indian homeowners. The pandemic in particular led to the revelation of these preferences, with many buyers wanting spacious homes with built-in work and study spaces owing to the pandemic restrictions. While these constraints have been lifted, the evolution when it comes to housing preferences has been permanent.
The pandemic has also reiterated the need for living responsibly, driving demand for homes built with sustainability as a priority. Not only that, it also plunged young professionals all over the country into housing uncertainty, with many of them more inclined than ever to purchase holistic living spaces that match their aspiration of leading an elevated lifestyle.
Moreover, the rapid urbanisation and rising disposable income of people have also been major factors in driving up demand and the sale of luxury homes. A survey by a leading real estate consultancy corroborated the findings that homeowners today prefer homes with future-oriented amenities such as smart home technology, eco-friendly fixtures, and recreational facilities. It is no wonder then that in 2023, the sales and demand for the luxury segment in the top cities in India far outpaced the previous years and other residential segments.
Increasing demand by NRI & HNI
The last decade has also witnessed a significant surge in luxury residential real estate investment by NRIs and HNIs. The year 2023 in particular saw a monumental increase in the purchase of luxury housing by this segment, driven not only by the strong emotional and cultural ties these people feel with their homeland but also due to the country’s booming economy.
As mentioned above, the Indian economy has been performing exceptionally well, with projections for the country to possess the third largest economy by 2030. This has lured many NRIs and HNIs to invest in the country’s thriving economy. In addition to this, the government’s liberal regulatory framework as well as the introduction of policies aimed at refurbishing and uplifting the country’s infrastructure have further aided in attracting many NRIs to invest in luxury homes here.
Further, the depreciation of the Indian rupee against major foreign currencies and the high disposable income of NRIs also motivate them to invest in India’s booming real estate market. Combined with the international standards that Indian developers are utilising to construct luxury homes, this culminates in many foreign nationals investing in luxury properties for both recreational and investment purposes.
Final Thoughts
While the year 2023 has been phenomenal for both the Indian economy and the real estate sector, if industry pundits are to believe 2024 is poised to be the industry’s finest year, Continuing the Indian saga of economic growth, according to the IMF, India is again poised to emerge as the fastest-growing economy in the world in 2024, making it an attractive investment ecosystem. Further, from a decreased repo rate to relatively affordable home loan EMIs, the real estate sector is primed to boom in 2024.
