Housing demand in the country is projected to touch 93 million by 2036 due to an increase in demand from both urban and rural areas, healthy macro-economic indicators and favourable demographics. Several Tier II and III cities are expected to spearhead both real estate demand and supply, a new report by Credai and Liases Foras has said.
The report was released at the New India Summit organised by Confederation of Real Estate Developers’ Associations of India, (CREDAI) in Varanasi recently. The association will complete 25 years in 2024.
With Government programs to establish Smart Cities, it is expected that the next wave of real estate growth will stem from Tier II, III regions, the report noted.
The year gone by witnessed high volume of registrations and interest from homebuyers. Over 19,050 projects (45% residential projects) were registered under RERA across the country, according to the Liases Foras and CREDAI report.
The housing inventory at a pan India level currently stands at 10,42,195 units, declining 3% on a QoQ basis but increasing by 2% on a YoY basis. Cities such as MMR and Ahmedabad witnessed a steep decline in the inventory levels in the quarter ending in September 2023. Tier II cities, on the back of robust demand, also saw a drop in inventory.
From a pricing perspective, the report reveals that there has been a 6% CAGR in apartment prices (at ₹11,660 per square feet), with NCR witnessing the highest growth at 22%.
“The rapid growth of the Indian population and economy has resulted in accelerated demand and supply of homes, while also improving home buyers’ purchasing power and inclining them to buy bigger houses. The country is set to develop manifold in the next 10-15 years and hence, through this report we look towards setting a new precedent with the emergence of Tier II, III regions,” said Boman Irani, president, CREDAI.
Pankaj Kapoor, founder and managing director, Liases Foras, said, “Indian real estate currently stands at an extremely important junction with sustained demand and supply greatly contributing to the GDP while showcasing a definitive way forward for reaching the $5 trillion goal.”
“We expect housing demand to stay robust for the next few years, with luxury properties paving the way, due to homebuyers increasing preference for spacious and comfortable living in both metros as well as in other cities,” said Mohit Jain, Managing Director, Krisumi Corporation.
At the event held in Varanasi, Credai also said that it will certify 1 lakh homes and 25 million sq ft of commercial real estate with green building certifications every year.
Also Read: CREDAI pledges 1,000 green buildings by 2025
The organisation has directed developers, who are part of CREDAI, to ensure all the projects developed by them are compliant for green building certifications. Green-certified office stock in India has increased by over 36% since 2019, with Bengaluru, Delhi-NCR, and Mumbai leading the way.
At the summit, CREDAI signed a Memorandum of Understanding (MoU) with World Trade Centers Association (WTCA) in a step towards promoting trade and ensuring world class commercial properties are developed in India focusing on Tier 2 and Tier 3 cities. CREDAI also signed an MoU with Energy Efficiency Services Limited (EESL) to pursue and promote energy efficiency.
“Real estate has been one of the greatest amplifiers of the Indian economy, and the New India Summit acts as the proof of the same. This year as we celebrate our 25th anniversary, we also celebrate the growth that our industry has been an active part of in India’s growth journey. Through the summit, we wish to lay the foundations for a greener, more futuristic India,” said Manoj Gaur, Chairman, CREDAI.
A CBRE-CREDAI report was also released at the event. It said that Uttar Pradesh has emerged among the top three states as a significant contributor to the Micro, Small, and Medium Enterprises (MSME) sector, with a 9% share in the MSME landscape in the country.