Many real estate players are foraying into newer geographies to untap the growth potential.

Dr Niranjan Hiranandani

Managing Director, Hiranandani Group

What are the major trends visible currently in the real estate markets of western region?

The key real estate markets are reckoning the booming sales of mid and luxury homes since the outbreak of Covid has induced homebuyers to opt for conducive living homes. As per the affordability quotient, prospective buyers are upgrading to a spacious home with privacy and comfort at its focal point. The demand for holistic living which offers social and entertainment amenities in proximity well connected to the workplace and quick healthcare service in vicinity has been pivotal. Also, the trend of market consolidation in the developer's fraternity is enabling homebuyers to leverage the benefit of branded organized players in the market. Many real estate players are foraying into the newer geographies to untap the growth potential and expand their portfolio across varied homebuying segments.

How are the luxury and affordable segments performing currently?

The affordable housing segment is the most affected due to sticky inflation and subsequent rise in interest rates. This has widely impacted the affordable quotient of price sensitive homebuyers who comprise a broad spectrum of homebuyers' segment. A rising interest rate raises the cost of credit borrowings for developers and makes construction more expensive. It has become more unviable for the developers in the affordable housing category to develop financially feasible projects amidst high economic vagaries.

In contrast, luxury housing has shown fair growth post-Covid pandemic despite rising home loan interest rates and stamp duty withdrawals. The inherent demand for better quality of life and well-balanced holistic lifestyle, homebuyers have been pedaling towards luxury homebuying. A rise in disposable income, new hires, and attractive schemes offered by developers have enticed homebuyers to invest in luxury homes.

How far the interest rate hike has impacted the sales?

The spiraling hike in home loan interest rate has undoubtedly impacted on the housing sales across the key markets. The homebuying decision has seen delay in the actual closures, causing slag in sales velocity in the affordable housing segment. It is evident that interest rate sensitive homebuyers are taking inflation into account when making a buying decision.   

What is the trend in the commercial real estate segment?

The commercial real estate segment has bounced back with economic resilience and GDP growth. Indian grade A assets have garnered attention from the global as well domestic players and pulled in huge foreign investment. This signifies its growth potential on a positive scale with various classes of assets picking up the pace. The organized retail, flex spaces, logistics & warehousing, data centers are new emerging asset classes driving the growth of commercial real estate.

After the Budget announcements, what opportunities do you foresee this year for the real estate market?

The Union Budget has granted an impetus to the infrastructure outlays which will redefine the landscape of real estate pan India. The last mile connectivity and transit-oriented development will unleash multiplier growth opportunities for every real estate asset class to expand their footprint in emerging nodes of the economic corridor. The emphasis on the PMAY housing scheme will catalyze the growth of affordable housing to achieve the target of Housing for all.

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