2022 was a year of recovery and growth for the Indian residential market with tangible signs of revival and resilience, which is demonstrated in the growth of residential demand and supply across the country. Despite the industry’s numerous challenges, housing sales have strongly rebounded this year and real estate purchases will continue as residential real estate, has benefited greatly from the post-pandemic rebound and is anticipated to experience a similar growing pace in sales in 2023.

The main cities in India have experienced a new peak in property sales in 2022, breaking the previous record set in 2014. Data from real estate advice firm Anarock shows that in the top 7 cities, more than 3,57,635 units were sold in 2022 as opposed to 2,36,693 units in 2021. Mumbai experienced the most sales in 2022, up from 56,883 units in 2021 to around 1,24,652 units in 2022.

Residential real estate was able to acquire and keep momentum due to low mortgage rates and continuously rising homeownership sentiment. Property buyers have also shown a shift in focus from location-specific preferences to a preference for practical homes with supplementary amenities. The government has also been encouraging home ownership by offering grants and loans to first-time buyers who need assistance in purchasing homes that fit their budgets and needs.

Although in response to a rise in construction costs, real estate prices in the residential sector increased by an average of 4–8%. There was also added pressure from the Reserve Bank’s 225 basis point increase in interest rates since May. Demand, however, continued to be strong due to positive consumer attitudes. 

India’s residential real estate business, saw astonishing growth and sales that broke records. Here are several trends that contributed to 2022 being a successful year for the real estate sector

• New construction now features more mid-range and luxury homes : – The three sectors with the highest sales in 2022 were mid-range (INR 40 – 80 lakh), premium (INR 80 lakh – INR 1.5 Cr), and luxury (>INR 1.5 Cr). Affordable housing, on the other hand, had a difficult time, with more buyers in this segment adopting a cautious approach attitude; therefore, new supply in this category significantly decreased.

• The expansion of suburbs : – Despite the near-normal circumstances following COVID-19, remote locales dominated the demand in 2022. Compact residences positioned close to city center in overpriced urban areas are part of the walk-to-work idea, which has lost appeal. Despite the return of remote work and physical school attendance, the suburbs triumphed.

• Property values rise : – Despite an average 5-7% increase in housing prices in 2022 and rising home loan rates, residential sales did not suffer. After a period of relative stagnation of 2-3 years, these price increases were inevitable.

• Spikes in rental demand : – Rental demand increased once more after sharply declining during the worst of the pandemic, at least in the hybrid model, as more businesses called their staff back to the office. Demand on the rental market has exceeded pre-pandemic levels. On average, rentals increased 20–25% from pre-pandemic levels, with some of the most populated societies experiencing increases of more than 30%.

• Planned communities were preferred : – In 2022, planned communities were common, particularly in South Indian towns. While plotted developments dominated the residential landscape in Bengaluru, Chennai, and Hyderabad despite the pandemic’s harshest effects, which included a rise in desire for independent living.

• Integrated living was prioritized : – The notion of integrated living is quickly growing rapidly in the residential sector, with home buyers preferring projects with modern amenities such as shopping malls with multiplexes, schools, hospitals, leisure clubs, office buildings, and parks. This trend accelerated, as home buyers sought a more peaceful, self-sufficient, and secure lifestyle. While township living meets all of residents’ social, civic, and recreational needs and is equipped with multi-layer security systems, demand for township living increased and is expected to continue in 2023.

• NRI home buyers became more interested : – NRIs who own a home in this country have a sense of security and continuity to fall back on in times of crisis. This gave them the option of retiring in the country or exploring new business opportunities in the region. The combination of low home loan rates, a drop in the Indian rupee’s exchange rate, great offers and deals, the availability of houses, and never-before-seen pricing will made 2022 a good year in terms of NRIs investment in real estate.

• Real estate as a potential investment : – The tangible aspect of the home as a long-term investment tool is stronger than ever. The year 2022 saw an increase in secondary home purchases. People began to recognize the advantages of investing in real estate and saw it as a safe and secure investment option. Given that the real estate market is less volatile than other investment markets and provides higher returns, 2022 saw a multiplication of real estate investments.

The year 2022 has revealed the increased assurance of purchasers, investors, and developers. There is widespread belief that 2023 will not be all that different from 2022, which saw a magnificently booming real estate market. We are optimistic that the sector will continue to thrive and post new growth figures.