7% rise in investors in residential properties in second half of 2023: FICCI-Anarock survey

The Indian real estate industry has experienced a significant positive shift in homebuyer sentiment and investment during the second half of 2023, as per a recent survey conducted by trade body FICCI and real estate consultant Anarock.

According to the survey released on Tuesday, March 5, at the 17th edition of the FICCI Real Estate Summit, there was a 7 per cent increase in investors considering residential real estate as a viable investment option, with 36 per cent of expected buyers viewing properties as an investment option in the latter half of 2023.  

Commenting on the trend, Anuj Puri, Chairman of ANAROCK Property Consultants, said, "We surveyed 15,000 home consumers, and 57 per cent of these consumers say that real estate is a first preference as an asset class."

The survey also highlighted the increasing preference for new property launches over ready-to-move-in properties among buyers, with the ratio dramatically shifting from 46:18 in the first half of 2020 to 23:24 in the second half of 2023.

This change in direction is a reflection of buyers' increasing trust in larger, more reputable developers who are renowned for completing projects on schedule, as opposed to the frequent delays connected with smaller developers, the report stated.

"The government's increased spending on the infrastructure sector, stable policy regime, and commitment to providing housing for all are not only helping the real estate sector’s growth but also accelerating the growth momentum," noted Raj Menda, Chairman of the FICCI Committee on Urban Development and Real Estate and Chairman of the Supervisory Board, RMZ Corporation.

Additionally, he said, “Interest rates are expected to undergo a downward revision in the next two years, acting as a great impetus for both commercial and residential real estate. This division allows borrowers to purchase larger homes, contributing to the real estate market's expansion."

Luxury homes also saw a rise in demand, with 20 per cent of respondents favouring such properties in the latter half of 2023, up from 12 per cent in the latter half of 2021.

Meanwhile, the demand for affordable housing has decreased significantly, from 40 per cent in the second half of 2020 to just 21 per cent in the second half of 2023, prompting developers to adjust the supply accordingly.

Further, the survey reveals a notable preference for larger homes, with 50 per cent of respondents favouring 3BHK configurations. This preference underscores a trend towards more spacious living environments despite the normalisation of life post-pandemic and rising residential prices.

Gaurav Pandey, Co-Chairman, FICCI Committee on Urban Development and Real Estate, and Managing Director and CEO, Godrej Properties, highlighting the vibrant potential of India's real estate sector, emphasised the explosive growth of Indian wealth, particularly in equities and gold, and its implications for residential real estate.

Pandey also projected a transformative impact on land and property values, especially in top cities. He pointed out the critical role of urban migration in this evolution, suggesting a significant shift towards higher-income brackets and its consequent effect on the demand for residential spaces.