Real Estate in 2024: Positive outlook, rising demand expected to drive growth

In the wake of a resilient performance in 2023 amid global disruptions, the real estate sector is expected to have robust growth in 2024. With key economic indicators aligning favourably, both residential and commercial real estate markets are expected to thrive this year. 

According to Anarock Consultancy, housing sales hit a decade-high of 4.76 lakh units in the top 7 cities, recording a remarkable 31 per cent YoY (year-on-year) growth. The commercial real estate sector demonstrated resilience in 2023, overcoming global disruptions and high inflation. 

Leasing absorptions in major markets reached the Q3 2022 level of 38 million square feet (MSF) and are expected to reach around 50 million square feet (MSF), matching or surpassing the historic high of 2022. Flex space, engineering, and manufacturing emerged as major growth drivers.

Harsh Binani, Co-Founder, Smartworks is bullish about flex spaces further brightening the prospects of commercial office real estate in the coming times. 

“India has emerged as a global hub for flex spaces exceeding 10 per cent utilization for virtually non-existent levels amidst increasing demand for managed solutions for corporate giants and startups. Enhanced tech penetration has facilitated better management of spaces and operations, fostering a collaborative, efficient and productive working eco-system," he said.

"Companies are also deriving cost-optimization and talent retention benefits by increasingly setting up offices in Tier 2 cities. Against this backdrop, the dream run for the flex sector is poised to continue in 2024 with a surge in demand across sectors and geographies amidst growing interest from GCCs and Smartworks' campus model capturing the attention of major enterprises", he added.

Also, the growth exhibited by alternate asset classes such as logistics, industrial & warehousing, senior living, holiday homes, student housing, and data centres will be pivotal in driving real estate growth in 2024.