The Indian property market is expected to experience prolonged expansion this year due to consistent housing demand, as per Boman Irani, chief of the Confederation of Real Estate Developers’ Associations of India (CREDAI). In his latest industry forecast, Irani highlighted the robustness of the sector and anticipated that real estate prices would increase at a pace surpassing the inflation rate, fueled by ongoing demand and advantageous market scenarios.
The Indian real estate sector is poised for continued growth this year as housing demand continues to remain strong, according to Boman Irani, president of the Confederation of Real Estate Developers’ Associations of India (CREDAI). In his recent outlook for the industry, Irani emphasized the sector’s resilience and projected that property prices would rise faster than the inflation rate, driven by sustained demand and favorable market conditions.
A consistent increase in housing demand
The appetite for residential properties has been climbing steadily, driven by a variety of elements. A major catalyst has been the change in consumer priorities due to the pandemic. With remote work becoming more prevalent and individuals spending increased time at home, the significance of having a comfortable and safe living environment became paramount. This transformation has resulted in a heightened interest in homes, especially those providing more spacious areas, improved amenities, and proximity to green spaces.
Furthermore, Irani pointed out that the low-interest rates on home loans have been vital in maintaining demand. In recent years, affordable financing has made owning a home within reach for a wider range of people. Even with the recent minor upticks in interest rates, the demand has persisted, showcasing the continued robust need for housing across different income brackets.
Another element contributing to this trend is the increasing number of millennial homebuyers. As a large segment of India’s population falls within the working-age group, the younger generation is increasingly choosing to own homes rather than rent. This shift in preference is anticipated to support strong demand for residential properties in the forthcoming years.
Another contributing factor is the rise of millennial homebuyers. With a significant portion of India’s population in the working-age bracket, the younger generation is increasingly prioritizing homeownership over renting. This generational shift is expected to sustain robust demand for residential properties over the coming years.
Even as housing demand stays robust, real estate prices are climbing as well. Irani predicts that this growth will exceed the inflation rate in 2025. Various elements are driving this price increase, such as higher input costs, escalated construction expenses, and a more constrained supply-demand balance in major markets.
Materials like steel, cement, and other construction necessities have experienced price hikes in recent times, compelling developers to modify property prices to sustain profitability. Moreover, regulatory shifts and compliance demands have increased project expenses, further contributing to the rise in overall residential unit costs.
Simultaneously, the demand-supply imbalance in specific urban areas has fostered an environment for price growth. Prime spots in major cities and expanding Tier 2 and Tier 3 cities have seen increased demand, with a shortage of inventory in some regions. This has led to elevated property values, especially for projects targeting mid- and high-income groups.
At the same time, the demand-supply gap in certain urban centers has created conditions conducive to price appreciation. Prime locations in metropolitan cities and growing Tier 2 and Tier 3 cities have witnessed heightened demand, with limited inventory available in some areas. This has resulted in higher property valuations, particularly for projects that cater to mid- and high-income segments.
Irani pointed out that, while prices are rising, they remain within a reasonable range compared to global benchmarks. He emphasized that the sector’s focus remains on sustainable growth that benefits both developers and homebuyers, ensuring that housing remains an attractive investment option.
Government policy measures and reforms implemented in recent years have been crucial in forming the optimistic perspective for the real estate industry. Actions like the Real Estate (Regulation and Development) Act (RERA), the introduction of the Goods and Services Tax (GST), and incentives for affordable housing have improved transparency, simplified procedures, and reinstated confidence in the market.
Policy measures and reforms introduced by the government over the past few years have played a vital role in shaping the positive outlook for the real estate sector. Initiatives such as the Real Estate (Regulation and Development) Act (RERA), the implementation of the Goods and Services Tax (GST), and incentives for affordable housing have enhanced transparency, streamlined processes, and restored trust in the market.
Moreover, the government’s drive for infrastructure advancements, such as Smart Cities initiatives and enhanced connectivity, has elevated the real estate outlook in developing markets. These improvements have broadened the opportunities for housing developments in previously underserved regions, aiding the sector’s overall expansion.
Prospects for 2025 and beyond
Outlook for 2025 and beyond
Sustainability has notably become an essential factor for both developers and purchasers. With heightened awareness of environmental issues, the demand for eco-friendly buildings and energy-efficient residences is rising. Developers are addressing this trend by integrating sustainable methods into their projects, appealing to environmentally aware buyers and cutting long-term operational costs.
Sustainability, in particular, has become a key consideration for both developers and buyers. With increasing awareness of environmental challenges, there is a growing demand for green buildings and energy-efficient homes. Developers are responding to this trend by incorporating sustainable practices into their projects, which not only appeal to environmentally conscious buyers but also reduce long-term operational costs.
Technology is another area where the real estate sector is witnessing significant transformation. From digital marketing and virtual property tours to the use of artificial intelligence in design and construction, technology is enhancing efficiency and improving the overall customer experience. Irani emphasized that embracing technological advancements would be essential for developers to stay competitive and meet the evolving needs of modern homebuyers.
Despite the positive outlook, Irani acknowledged that challenges remain. The sector continues to grapple with issues such as lengthy approval processes, regulatory hurdles, and limited access to affordable land in urban areas. Addressing these challenges will require collaboration between developers, policymakers, and other stakeholders to create an ecosystem that supports sustainable growth.
A promising future for homebuyers and investors
For potential homebuyers and investors, the current market dynamics present a promising opportunity. With demand expected to remain strong and prices projected to grow steadily, real estate continues to be an attractive investment avenue. Irani highlighted that property remains one of the most reliable assets for wealth creation and long-term financial security, particularly in a market as dynamic as India’s.
In conclusion, the Indian real estate sector is on a robust growth trajectory, driven by sustained demand, favorable policies, and evolving consumer preferences. As housing prices rise in tandem with inflation, the market presents a unique opportunity for buyers and developers alike. With continued focus on innovation, sustainability, and collaboration, the real estate industry is well-positioned to play a pivotal role in India’s economic development in 2025 and beyond.
