The real estate sector in India has witnessed a significant surge in home sales since the onset of the COVID-19 pandemic. Let’s explore what makes this trend unique for investors.
What’s Happening?
Despite the challenges faced by the Indian real estate sector during the pandemic and delays in project completion, the sector has emerged with strong performance. Additionally, as mentioned in Money Control, according to Knight Frank data, in the July-September quarter, housing sales in eight major cities reached the highest level in six years, driven by increasing demand.
Key Highlights
As mentioned in Outlook, according to a report by Anarock Research, the Indian housing market surpassed all previous records in 2023. Each quarter has witnessed new records in home sales. Notably, before the release of Q4 2023 figures, the total sales value of homes sold in 2023 had already crossed Rs 4.5 lakh crore, a 38% increase compared to all sales values in 2022. Last year, the total value of home sales was Rs 3.27 lakh crore.
Factors Contributing to Growth
Post-pandemic factors such as reduced interest rates, property prices staying at reasonable levels, salary growth, and opportunities in various new job sectors have played a crucial role in boosting home sales. The recent decision by the RBI’s Monetary Policy Committee not to change the repo rate could further incentivise home loans.
Impact on Other Sectors
If there is growth in the housing market, it indicates an improvement in people’s economic conditions. When people experience an improvement in their economic situation, they are motivated to spend more, leading to growth in retail, FMCG, and other companies.
What’s Next?
According to the Economic Times, the Reserve Bank of India has decided to maintain the repo rate at 6.5% for the fifth consecutive time, providing support to the property market and helping sustain growth in housing sales.
Expectations for growth lie in the medium and premium categories of home sales, while growth in affordable and low-income housing may be affected due to higher sensitivity to interest rates.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information purposes only. This is not an investment advice.
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