The year 2023 was a year of healthy growth for real estate with many distinct trends. Torbit Realty lists ten prominent trends of 2023.
Vinod Behl
1 Mixed-Use Developments
The rising trend of mixed-use developments was witnessed during the year. On the residential front, both high-rise apartments and low-rise floors/villas turned out to be major drivers. For commercial real estate, the trend of SCOs gained momentum, boosting office real estate. Both high street retail and shopping malls gave a big push to retail realty. There was a trend of mega shopping malls and focused malls with greater emphasis on F&B and entertainment zones.
2 Rise of Luxury Homes & Decline in Affordable Housing
The year 2023 is marked by the boom in luxury /ultra luxury homes. Along with luxury homes, premium homes also contributed significantly to high growth of housing. The robust growth of luxury housing saw a large number of UHNIs and HNIs making investments. While luxury housing was on an upswing, affordable housing, though in demand, saw a dip in its share in overall housing sales.
3 Double-Engine Driven Realty Market
In the last few years, we witnessed the trend of the end-user driven realty market. But this year, the realty market was driven by a double-engine. While end-users continue to drive real estate, investors are now equally active in pushing realty growth. This is largely due to real estate witnessing handsome appreciation. Especially NRIs have been increasingly investing in real estate, taking advantage of the strengthening dollar against the rupee.
4 Rise of Green Sustainable Real Estate
The year saw green sustainable real estate maintaining growth momentum amidst increasing awareness and demand from property buyers, occupiers and investors for eco-friendly and sustainable living. The government’s enabling policies, increased funding avenues for green real estate amidst global efforts to tackle climate change and economic potential of green buildings, has made industry give a big push to green real estate.
5 Flex Space & GCCs push to Commercial Office Realty
On the commercial office front, flexible space emerged as a major growth driver on account of hybrid working and global companies opting for co-work spaces due to business uncertainties amidst economic headwinds. The push to digitally-enabled innovative eco-system by the government has seen Global Capability Centers (GCCs) from APAC and Eastern European countries setting up offices in India, powering the growth of Indian commercial real estate.
6 Augmentation of Alternate Realty
Alternate realty got a major boost in 2023. The Modi government’s initiatives like digitalization of industries, boost to internet, data localization and making India an outsourcing hub, saw data centers on a high growth path. Similarly, for alternate asset classes of logistics and warehousing, 2023 was a good year., with massive infra development including digital infra. , giving boost to online shopping, in turn creating higher demand for storage and distribution leading to high growth in warehousing. Government’s big push to manufacturing saw the rise of industrial real estate.
7 Homebuyers’ Growing Trust in Under-Construction Property
Unlike last year when homebuyers largely preferred ready-to-move homes to avoid development risks, this year they have reposed greater faith in under-construction property amidst government’s big push to completion of stalled homes with policies like SWAMIH Fund. They also went in for homes in the projects of large listed developers with sound financial health, quality and timely delivery.
8 Market Consolidation by Large Listed Developers
The real estate market saw further consolidation in 2023 with greater corporatization of the sector. Big branded and listed developers forayed into newer geographies, they dominated the supply and sale of property by offering high quality lifestyle homes with sustainable features.
9 Rise of Tier 2-3 Cities
The year saw unprecedented growth of real estate in Tier 2-3 cities, with many developers expanding into these cities. This was made possible through big connectivity boost due to government’s massive thrust to infra development. Post-Covid push to distributed/satellite offices in smaller cities and the trend of work from home town gained momentum this year. The expressway, rail and regional air connectivity also gave a push to holiday/vacation homes.
10 Fewer Festive Deals
Unlike in the previous year, 2023 saw fewer deals and discounts offered by developers to homebuyers during the festive season. This has been largely due to robust residential demand and sales this year due to growing urge for home ownership in view of high rentals and long pause in interest rates.
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