The year has been particularly favorable for the real estate industry, especially the housing sector. Let’s explore the major trends in the housing sector during 2023, which is now in its final phase. It’s already December 19th, marking the conclusion of the year, with just a few days left before the arrival of the new year, 2024. As this year comes to a close, let’s delve into how the entire year has fared for the housing sector and what lies ahead in the upcoming year.
Significant Increase in Sales Compared to Last Year Statistics indicate that this year has been remarkably successful for the real estate sector, especially in the housing segment. Despite the persistently high interest rates on home loans this year, the demand for houses remained robust. A fresh report from Anarock suggests that the final sales figures for homes in 2023 could be nearly 40 percent higher compared to the previous year, i.e., 2022.
Sales Figures for the First Nine Months According to the report, during the initial nine months of 2023, homes worth Rs. 3.49 lakh crore have been sold across the top 7 cities in the country. Sales in the initial nine months have already surpassed the sales figures for the entire year of 2022. The pace of home sales in the top cities indicates that at least Rs. 1 lakh crore worth of homes may be sold in the last three months of the year. Consequently, the total sales for the entire year could reach Rs. 4.5 lakh crore, a substantial 37.61 percent increase in home sales compared to the previous year’s Rs. 3.27 lakh crore.
High-Interest Rates on Home Loans This scenario unfolds despite the high-interest rates prevailing in 2023. The Reserve Bank initiated a hike in the repo rate last May, which continued until February this year. During this period, the RBI increased the repo rate by a total of 2.50 percent, reaching a high of 6.50 percent. The RBI’s MPC meeting in December has also maintained the repo rate. Given the high repo rate, home loans have become expensive. However, this hasn’t significantly impacted home sales.
Increased Sales of Expensive Homes this Year Looking at unit sales instead of value, the increase in home sales appears slightly lower. In the first nine months of this year, more than 3.49 lakh housing units have been sold in the top seven cities. This is slightly lower compared to last year’s sales of 3.65 lakh homes. However, when assessed by value, sales have already exceeded the previous year in just nine months. This is primarily because luxury homes, i.e., high-value properties, have seen higher sales in 2023.
Hope for the Trend to Continue in the New Year Speaking of the coming year, there is hope that the trend of rapid home sales will continue. The beginning of the next financial year might witness a reduction in the repo rate. As the repo rate decreases, home loans are expected to become more affordable, potentially boosting housing demand. A CBR report indicates hopes for sustained sales of high-value homes in 2024. The most significant surge might be witnessed in the demand for homes priced between 45 lakh to 1 crore rupees.
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Source of Information: Internet
