Real Picture of Real Estate Market of India Owing to Lok Sabha Elections

India is a resourceful country having a vibrant and competitive landscape. Each of the sectors in India is witnessing a phenomenal growth with a major comeback after the slowdown of COVID-19. With the refinement of technology, India has experienced a dynamic shift which is driven by technological furtherance, demographic shifts, and economic fluctuations. Among all the sectors in India, real estate is booming rapidly and evolving into a dynamic factor of economic growth of India.

India's residential market registered all-time high sales as home buyers snapped up deals despite a jump in asking prices and the highest interest rates in six years. According to the veterans of the real estate market, the demand for real estate market will not only shine in 2024, but it will rise further and reach to an unattainable height.  

According to the report of Real Estate consultant firm Anarock Group, the sales of residential properties will rise by at least 30% this year, and it will touch 4.74 lakh units in primary (fresh sales) markets of top seven cities, Delhi-NCR (National Capital Region), Mumbai Metropolitan Region (MMR), Chennai, Kolkata, Bengaluru, Hyderabad, and Pune.

Key Factors Driving the Real Estate Market of India

1. Growing Population in Metro Cities: Cities like Bengaluru, Chennai, and Gurugram are significant tech hubs of India, attracting millions of people around the country. This vast and dynamic employment opportunity is pushing ahead the real estate sector. Gradually, these cities are becoming the depot of major organizations and high-net-worth individuals, leading to increased investment in real estate.
2. Widened Opportunity of Affordable Home Loan: In terms of home loan, interest rate plays the pivotal role in affordability. The lower interest rates can encourage borrowing and boost buyer activity. Public sector and private sector both the banks are offering a broad range of home loan with flexible pay back periods. However, investors need to be aware of potential interest rate hikes that could impact affordability.
3. Rising Demand of Co-working Spaces: With each passing day, businesses are adopting digital strategies and prioritizing flexible work arrangements, and as its immediate consequence the need for agile, technologically advanced office spaces and fulfillment centers has surged. The modernizations of commercial buildings have given birth to modern and ergonomically flexible work space. As the startups are growing in number, the demand of this kind of co-working spaces are surging and giving boost to the commercial real estate of India.
4. Shifting Focus on Green Buildings: As numerous data has unearthed about the severe condition of environment and natural ecosystem, people are actively participating in green movements to enable eco-friendly practices in every sectors of the industry. Likewise, environmental consciousness is also shaping the real estate landscape. The buildings are accompanied with eco-friendly features like energy efficiency and water conservation. These green buildings are not only attracting residential real estate market but commercial buildings are also opting for these buildings. These buildings are potentially commanding higher rents and property values in the market.
5. Inflow of NRI Investment: After the remarkable boom of real estate, it is attracting the NRI to invest in India’s evolving real estate market. NRIs are getting high return if they put the property on rent or lease. This huge influx of foreign capital is offering additional liquidity and further boosting the market sentiment.
6. Rise of Tier II & III Cities: As the population is ballooning every day, the investors and developers are eyeing on the satellite cities or Tier II & III cities. This development is providing attractive opportunities for investors seeking higher returns and potentially lower entry points compared to major metros.