Mid-Size Real Estate Developers Aim To Ride India’s Real Estate Boom

Mid-sized real estate developers expect the “boom” in India’s real estate market to continue for the next few years as the nation recovers from the disruptions caused by the Covid-19 pandemic.

India, like many countries across the globe, witnessed a pandemic property boom as lower interest rates prompted people to buy homes, resulting in a surge in housing sales volumes. Developers and analysts hope this optimism to stay on pent-up demand for residential units and growing household incomes even as the central bank’s tightening of the monetary policy to tame inflation has made home loans costlier.

This is “the beginning of a long booming cycle for the real estate sector for the next five years”, where demand will steadily rise for the next two-three years, Parth Chhajer, promoter of Arihant Superstructures Ltd., told BQ Prime’s Niraj Shah.

Manan Shah, managing director at Man Infraconstruction Ltd., also expects the surge to continue for a couple of years.

According to Dhaval Ajmera, director at Ajmera Realty & Infra, the “resilience and growth potential of the Indian economy will sustain the favourable real estate cycle for seven-eight years”.

India’s real estate sector—among the top contributors to the nation’s economic growth—is emerging from a prolonged slump due to reasons ranging from cash ban and a stricter housing law to an NBFC liquidity crisis that led to a pileup of unsold apartments. The recovery, according to Knight Frank, is aided by homebuyers’ need to upgrade primary lifestyle and comparatively low home prices to the pre-pandemic levels.

Housing sales, the property consultant said, rose 60% annually in January-June 2022 across eight major cities at 1,58,705 units, the highest half-yearly demand in nine years.