Real Estate Market Forecast 2022 and Everything You Need to Know

1 Aug, 2021

India's real estate market size is on an all-time high, with the realtors and property developers reaping benefits. All thanks to a booming economy, the increased purchasing power of people, and government initiatives such as the RERA act and Made in India have resulted in the highest ever transacted prices of properties across metros.

The steep rise in real estate prices has impacted the affordability of a home for many middle and lower-middle-class families. Real estate prices have been increasing for many years. However, the increase has been more than usual this year, and people are worried that it will be harder to buy a property shortly. Here we bring you everything you need to know about the real estate market forecasts and why it is the best time to invest in real estate.

#1 Residential Realty and Its Demand is Bouncing Back in 2021

(https://www.financialexpress.com/money/demand-for-residential-realty-bounces-back-in-june-2021-report/2284147/) According to Magic bricks’ Prop index Report, the residential realty market is expected to bounce back in 2021 with a remarkable percentage rise in demand for homes. This trend has been seen after a long and the revival of residential realty is expected.

For 3BHKs, the demand is expected to grow in different cities like Mumbai, Delhi-NCR, Pune, Bengaluru, and Chennai. Moreover, with the revival of the economy by 2021, the demand for residential real estate is expected to rise. Post the first COVID-19 wave, the demand for homes is expected to go up and would further increase in 2021. As a result, the sub-markets of Delhi/NCR, Mumbai, Bengaluru, and Chennai are expected to witness great growth, even in the 2nd and expected 3rd wave of COVID-19.

#2 Rentals, Tier-2, and Tier-3, will Witness a Greater Demand

(https://housing.com/news/will-the-new-year-be-a-turning-point-for-indias-real-estate-sector/#Tier-2_and_tier-3_cities_to_witness_greater_demand) Tier-2 and Tier-3 homes, particularly properties in semi-urban and near-suburban areas, are expected to see a better demand. The RERA act has made it necessary for the consumers to get all their documents verified by a third party, which would, in turn, help reduce the risk of fraud and delays.

The rental market will also witness rising demand as there is more demand for homes than supply. And not just in 2021, the rise of rental demand is expected to boom for the next 3 to 4 years. Factors like GST rate cuts and taxation gaps have been great investment opportunities for real estate investors, especially with positive economic changes. Ready-to-move-in homes are another great option for investors. A ready-to-move-in home is a property that has been constructed, and all the formalities have been completed but not sold yet.

Ready-to-move-in homes are gaining popularity among real estate investors because of the high returns they offer compared to other projects in Tier-2 and Tier-3 cities, where the demand is growing.

#3 NRI Investments Attracting Foreign Investment in Indian Real Estate Market

(https://www.ibef.org/industry/real-estate-india.aspx) With the growing demand for properties, there is a rise in foreign investment and interest from NRIs. The Indian property market is expected to witness an inflow of more foreign investment in the coming years; with the rise of Tier-2 and Tier-3 cities, there is a significant rise in demand for properties. In addition, the high growth rate in these cities is attracting foreign investors, many of whom are NRIs.

Bengaluru is expected to witness a rise in the number of foreign investors and developers, especially because it is expected to witness significant growth in IT. Apartment construction may also increase with the help of overseas capital. Other cities like Pune, Chennai, Ahmedabad, and Goa will also see more foreign investments.

#4 Low-Interest Rates to Continue in 2021

(https://www.financialexpress.com/money/real-estate-trends-to-watch-out-for-during-covid-19-second-wave/2252295/) The RBI has already cut down the repo rate (short-term lending rate) in August and September this year. The next policy will be announced soon by RBI, which may further reduce the interest rates on home loans. This would, in turn, attract more buyers to invest in real estate properties.

For the past 12 months, the interest rates have been relatively low, and the trend is expected to continue. Hence, home loans will be cheaper than what it was in 2017. The reduction of interest rates will help curb inflation and increase investment in real estate properties. This would also encourage new buyers to invest in homes and property markets.

#5 The Indian Real Estate Market will Touch $1 Trillion by 2030

(https://www.moneycontrol.com/news/economy/policy/real-estate-market-to-touch-1-trillion-by-2030-housing-demand-revives-despite-covid-19-housing-secretary-7203401.html) By 2030, the Indian real estate market is expected to touch $1 trillion, which marks an exceptional growth rate in this sector. Over the next few years, we can expect to see more demand and sales. The demand for properties will be higher because of affordable homes and greater financial liquidity.

Also, this sector is all set to offer 70 million direct and indirect employment opportunities. This would also help in the creation of new jobs, which will aid in GDP growth. Job creation is an important strategy for sustainable economic development in India, and the real estate sector can play a key role. Besides creating jobs directly, it also creates business opportunities for other sectors, which will positively impact growth rates.

#By 2025, India will be Among the Nations Responsible for 72% of the Global Constructions

(https://www.ashianahousing.com/real-estate-blog/is-it-wise-to-invest-in-the-indian-real-estate-market-in-2019-2020-and-2021) India is a diverse country that contains 29 states and seven union territories. It also has a vast range of people with different income levels, which means there is a large variety in demand for homes.

This diversity will allow India to compete with other countries like China, the US, and Japan in real estate sector growth. All these countries have their advantages, and India has its advantage over them. India is hence a potential market for the growth of the real estate sector as it offers vast opportunities for new investments in the coming years. The country is set to witness 11 crore yearly constructions by 2025.

Wrapping it Up

This was all for the Real Estate Market Forecast 2022. The real estate market size in India is expected to grow over the next few years. Several factors will drive this market. Investments are expected to increase, and the sales numbers will rise, which will positively impact the real estate market.
Get ready to invest in the Indian real estate market today!