Realty 2023: Highs & Lows

Vinod Behl(Editor at Torbit Realty) - December 24, 2023 - - 0 |

The year 2023 will be counted as a remarkable year for the real estate sector, with residential, commercial, and alternate sectors giving creditable performance despite global headwinds and inflation worries. Torbit Realty lists the high and low points of Indian real estate during the year.   Vinod Behl


1. Apartment Sales on a 15-Year High

There were record-breaking sales of 2.6 lakh units across 7 major cities in 2023 , against the sale of 215621 units in the CY 2022, registering a rise of about 20%. According to JLL, This was the highest since 2008.

2. Relief to Interest Rate Hike

The RBI provided relief to home buyers by putting a long pause to continuous increase in interest rates. The pause button was pressed in April 2023 after six consecutive rate hikes aggregating to 25bps since May 2022.

3. Boost to Housing Projects Completions

The government-mandated Special Window for Completion of Affordable & Mid-Income Housing SWAMIH Investment Fund gave a big push to project completions. As of November 16, 2023, 342 proposals aggregating to Rs 37554 crore were approved to benefit around 218699 home buyers and unlock projects worth Rs 94367 crore.

4. Relief to Builders & Home Buyers

The Uttar Pradesh government’s announced new policy of waiving off penalties and slashing interest rates on dues against 197 defaulter housing projects by real estate developers, paved the way for potentially 2.40 lakh home buyers to be able to register properties in their name.

5. RERA Boost to Residential Realty

There was a massive 63% surge in registrations of projects numbering 71307 having 1.16 lakh units under RERA between November 2021 and November 2023, About 82755 real estate agents were registered , up by 47% in the last two years. In a big relief to home buyers, there was a 47% rise in disposal of complaints totalling 78903 across states in the last two years.As many as 86% projects have been completed on time.

6. Appreciation in Property Values

The year 2023 was a positive year for real estate as top cities saw significant increase in property prices. It was the highest appreciation in a decade with home prices up 10-15% on low inventory, increased buyer interest and rising rental costs.

7. Rise in Sentiment Index

The year saw the real estate sector experiencing a surge in positive sentiment during Q2 2023. As per the 37th edition of Knight Frank India- Naredco Sentiment Index ., the score jumped to 63, well above the 50 mark which represents an optimistic outlook .

8. Rising Green Buildings Footprint

The green building footprint was on upsurge with an impressive 11000 green building projects , covering a staggering 10.27 billion square feet. by July 2023. According to RICS data, currently over 40% of India’s commercial Grade A stock is green certified .This year IGBC launched India’s first Net Zero Carbon Rating System.

9. IT SEZ Policy Push

In a major policy initiative, IT SEZ rules were amended under which a developer of an IT/ITeS sector SEZ , can permit demarcation of non-processing areas of that zone. This will benefit developers building IT/ITeS SEZs, in turn boosting demand for office real estate.

10. Land Acquisition Made Easy

With the rate of resolution of NCLT cases significantly going up, the process of land acquisition through banks and ARCs and under NCLT process was made simpler and more streamlined, benefitting developers , particularly large developers who have been acquiring land for expansion through this process.


1. Large Number of Stressed Housing Units

Despite various initiatives towards speeding up completion of housing projects, the number of stressed dwelling units, as per the report of Indian Banks’ Association, stood at a high figure of 4.12 lakh ( including 2.40 lakh units in NCR) . These units across a large number of stalled projects involve Rs 4.08 lakh crores.

2. Decline in PE Investments

PE investments in the real estate sector fell by 44% to USD 3 billion as dominating US and Canadian funds curbed investment activity amid geopolitical uncertainties and high interest rate environment globally.

3. Declining Share of Supply & Sales in Affordable Housing

The supply share of affordable housing, according to Anarock, came down to 18% in Q3 2023 against 24% in the corresponding period in 2021, as developers reduced their focus owing to shrinking margins. The 20% rise in EMI also led to reduced demand, with housing below Rs 50 lakh, according to Knight Frank, seeing a 10% on-year decline.

4. Smart Cities Mission Faced Projects Completion Challenge

The flagship Smart Cities Mission (SCM) of the central government struggled to meet its completion target as in 2023 , about 21% projects were yet to be completed even when the extended deadline of June 2024 is approaching.

5. Huge Defaults by Developers

Developers owed huge dues to development authorities particularly in the North. Developers have payment default of Rs 26570 crore to Noida Authority while Greater Noida & Yamuna Authorities have to recover Rs 14309 crore and 11000 crore respectively from developers. In Haryana builders owe Rs 10000-15000 crore of development charges to the state government whereas in Punjab, private builders owe Rs 700 crore of dues .

6. Under Performance by REITs

REITs listed on domestic stock exchanges gave poor performance on account of delay in pick-up in commercial real estate, slow down in IT sector and higher interest rates. Prices of listed REITs declined by 5%-16% despite the booming stock market.

7. Funding to Tech Startups Drops

The year saw the start up boom fading as funding to tech startups including those in the real estate sector dropped to lowest in 5 years. According to industry data, the funding to tech startups was 72% lower than last year.

8. Trailing Mega Infra Projects of NCR

The NCR saw some leading infrastructure projects trailing during the year. The much awaited Gurgaon Metro Extension project lingering for years, could not take off even this year. Similarly, the ambitious Dwarka Expressway project’ eluded this year as well as its completion has been pushed to 2024.

9. PMAY Behind Targets

Housing For All, the flagship scheme of the Centre to provide homes to urban poor under PMAY-U has been way behind in meeting its targets which were initially set at 2 crore. As per government data, overall 1.19 crore urban houses were sanctioned as of August 23 2023 and by July 2023, a total of 75.51 lakh houses were completed, pointing to a huge gap between demand and supply. especially as the scheme is to expire by December next year.

10 Low-Resolution of NCLT Cases

Real estate, which accounts for a high number of NCLT cases, had a poor record in terms of resolution of NCLT cases. As per the Insolvency and Bankruptcy Board of India (IBBI) data, ever since the Insolvency & Bankruptcy code came into existence in late 2016, by first half of 2023, only 13% of the filed cases were resolved.

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