About 58 per cent developers across India expect housing prices to increase in 2023. The rise in prices is likely to be led by robust demand for homes in the Indian market along with volatile key input costs, according to the findings of the Developer Sentiment Survey conducted by CREDAI, Colliers, and Liases Foras.
The Colliers-CREDAI-Liases Foras joint report, named Real Estate Developers’ Sentiment Survey 2023, explores different perspectives of developers on how the residential sector panned out in 2022 and how things will shape up in 2023.
Raw material costs have surged significantly in the last two years due to global supply chain disruption, which has led to inflationary pressures on the housing sector, too.
About 43 per cent developers said they saw project costs rising by 10-20 per cent in 2022 as against 2021 on account of rising input costs. This is in line with the Colliers’ construction cost Update: November 2022, which said that the cost of key construction materials had jumped about 32 per cent in a span of three years, which had led to increased costs of construction for the developers.
Harsh Vardhan Patodia, president, CREDAI National says, “The previous year provided the much-needed impetus and led to record-breaking sales in the last decade. Hence, more than 70 per cent of developers believe the demand for home ownership will either increase by 25 per cent or remain stable in 2023. With such sentiment, most developers in the community (87 per cent) are looking to expand their offerings, and the year is likely to see a surge in new launches equal to the current supply under construction.”
He adds: “Rising population, wealth growth, and rapid urbanisation are the key influencing factors driving the sector’s growth. Hence, to help maintain the momentum, almost 40 per cent of developers anticipate improved ease of doing business from the government in 2023, while another 31 per cent anticipate rationalisation and/or income tax credit GST.”
Ramesh Nair, CEO India and managing director, market development, Asia, Colliers, says: “During 2022, developers across the spectrum saw increased enquiries led by a continued inclination towards home ownership since the pandemic. The survey reveals that developers remain optimistic about the market. About 43 per cent of the developers feel that residential demand would remain stable in 2023. Homebuyers remain enthused about purchasing homes, despite rising interest rates . Developers, too, are focusing on launching projects that are aligned as per the needs of the homebuyers, and are also formulating strategies to complete their pending projects and bring in demand-led supply.”
Pankaj Kapoor, managing director, Liases Foras added that 2022 witnessed the highest-ever sales and new launches across major cities in India.
“We have also seen a marginal increase in property prices. The market is likely to maintain the momentum, which the sentiment survey re-affirms,” he adds.