Indian Real Estate Market Recovery: Understanding Trends and Opportunities (FY20-23)

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    Overview: India’s real estate market bounced back strongly after facing challenges during the pandemic. Buyers regained trust despite project delays and fraud by developers. Knight Frank’s data shows a surge in home sales in major cities, giving developers a chance to recover. Even though there’s more unsold property, smart strategies by developers are reducing this in some areas.

    Inventory Situation: More properties are unsold now compared to before. The total value of unsold homes from top listed companies reached over Rs 1 lakh crore, which equals about 33 months of sales. Yet, in some places, the number of unsold homes is dropping as developers focus on selling older properties instead of launching too many new ones.

    Market Trends and Sales: Big real estate companies sold a lot more in FY23 compared to previous years. Home sales in 2023’s first nine months almost matched the sales of the entire previous year. This is good news, especially with higher mortgage rates.

    Impact of High Inventory: Even though there’s a lot unsold, sales are happening faster than before. But having too much unsold property for too long can cost more for developers. Still, right now, buyers are interested, and rising prices are making them feel like they’re getting a better deal.

    Different Markets: Luxury homes are selling well in some places, but homes in the affordable range are struggling. Higher interest rates are making it tough for buyers to afford homes in the lower price range. Lower rates could make a big difference for these buyers.

    Investment Advice and Outlook: Experts are hopeful about real estate growth but advise being careful when investing. They suggest looking at companies related to real estate like tile or paint companies, which can be steadier investments and less risky than directly buying property.

    In conclusion, the real estate market is getting better, but it’s a mix of good and challenging situations. Smart moves by developers, changing buyer preferences, and careful investment choices will shape how the market progresses.

    (Source: Money control)

    Also read: Prestige Group Unveils Prestige Ocean Pearl: A Grand Residential Project in Kozhikode, Kerala

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