Anuj Puri Affordability is the key for Market Stability
“In MMR, developers have been shrinking flat sizes to balance the impact of sky-high property prices, which are already among the most expensive in the country. Meanwhile,
with its far more affordable property rates, NCR and Bengaluru have witnessed a surge in demand for larger, luxury homes,” observes ANUJ PURI, Chairman and Founder of ANAROCK, during an exclusive interaction with H&B Media Networks.”
What was the state of Indian real estate when you started in this sector, and how has it evolved since then?
When I began my real estate journey, the industry was largely unorganised. Even then, its potential was unmistakable; undoubtedly, those who understood benefited and profited. However, the consumer was on the back foot all those years. Over the years, I have watched it evolve into an increasingly transparent, fair, and predictable sector that delivers uniformly to all stakeholders.
What are the three most significant changes you’ve witnessed in the industry during these decades that have forever changed real estate?
• Regulation — Over the years, real estate has become increasingly regulated. At one time, this seemed impossible; Indian real estate was like a Wild West frontier where much was left to chance, and only the fastest gun could win. However, this has changed completely thanks to the government’s increasing focus on regulation.
• Customer centricity — In earlier years, developers focused little on what end-users really wanted. Instead, they built whatever made sense to them. Little in-depth market research drove this supply. This has changed entirely, and projects are conceived only after the developer has tried to understand whether the market wants them and if they will sell well.
• A more cohesive market – Unlike in earlier years, various real estate segments coexist in synchronicity. Retail, office, residential, and hospitality projects are created as parts of a well-oiled whole, each serving and amplifying the other. The days of thoughtless supply churn are mostly over.
As a thought leader, what is your observation on the key trends currently shaping the Indian real estate industry, especially in residential, commercial, and industrial segments?
In the residential sector, supply is geared towards actual demand and is constantly driven by urbanisation and changing consumer preferences. The luxury segment is doing exceptionally well, with more and more Indians preferring to settle for nothing less than a premium experience. In the commercial sector, we are witnessing an increasing demand for flexible workspaces because of the growing adoption of hybrid work models. Overall, the office market is seeing record-breaking leasing activity now. I don’t see this trend slowing down anytime soon, the India Story has become an essential part of the global narrative. In the industrial sector, there is increasing demand for warehousing and logistics because of the country’s rapid economic growth, concurrent infrastructure deployment, and the rapid rise in e-commerce retail. That said, land acquisition challenges somewhat compromise this process and must be addressed. Retail real estate staged a resounding comeback after a critical slump during the pandemic. The Indian consumer is back with a vengeance, seeking premium shopping experiences even in tier 2 and 3 cities. I do not see the rise of e-commerce as a serious challenge to physical retail. Rather, it provides a healthy dose of competitiveness that will keep the physical retail sector on its toes.
How do you see the residential and commercial real estate sectors evolving post-pandemic?
Post-Covid-19, the Indian real estate sector has shown resilience and transformation. Residential real estate witnessed a surge, especially in mid-segment and luxury housing, driven by low interest rates, remote working, and the demand for larger homes. Tier 2 and 3 cities have emerged as key growth markets, attracting homebuyers seeking affordability and quality of life. The commercial real estate segment, particularly office spaces, faced initial challenges but is recovering with the rise of hybrid work models and demand for Grade-A spaces. Industrial real estate, driven by the e-commerce boom and government incentives like PLI (Production-Linked Incentive) schemes, is set to grow significantly. Co-living and co-working spaces have also gained traction, catering to evolving urban lifestyles. While affordable housing remains a policy priority, the luxury and second-home markets are witnessing renewed interest among high-net-worth individuals. Industrial and warehousing real estate are expected to lead the next growth phase.
How have regulatory changes like RERA, GST, and NCLT laws improved sector transparency, consumer confidence, and the overall landscape of the real estate sector in India?
These reforms have significantly enhanced transparency and consumer confidence in India’s real estate sector. RERA mandates project registration, timely delivery, and stringent penalties for delays, ensuring accountability and protecting home buyers. It has brought much-needed transparency by enabling buyers to track project progress and developer credentials. GST simplified the tax structure by replacing multiple indirect taxes, reducing the tax burden on homebuyers and making pricing more transparent. Input tax credits for developers further contribute to cost efficiency. The NCLT framework has streamlined dispute resolution in real estate, offering quick remedies for delayed projects and insolvency cases, ensuring consumer interests are safeguarded. These reforms have created a more organised sector, curbing fraudulent practices and boosting investor trust. Consequently, the real estate market has become more attractive to institutional investors, fostering sustainable growth.
Your recent report revealed that NCR saw the highest average ticket size growth from approx. ₹93 L in H1 FY24 to over ₹1.45 cr in H1 FY25, followed by Bengaluru, Hyderabad, and Chennai. Meanwhile, MMR saw no change. In your opinion, what’s driving this sharp jump in NCR and no change in MMR?
In MMR, builders may have been decreasing flat sizes due to increased prices, which are already much higher than in other cities. This could explain why prices have remained relatively high over the previous year. Builders may be careful not to price themselves out of this hyper-expensive market. On the other hand, NCR is far more affordable and has seen rapid increases in flat sizes due to increased demand for luxury homes.
With the rising capital costs and fluctuating interest rates, how should Indian investors invest in real estate strategies to ensure long-term gains success?
By adopting innovative, diversified strategies, investors can navigate rising capital costs and fluctuating interest rates. Investing across residential, commercial, and industrial segments, particularly in Tier 2 and Tier 3 cities, balances risk and boosts growth potential. Prioritise rental-yielding properties, such as co-living spaces and office hubs, to ensure a steady income. Real Estate Investment Trusts (REITs) offer a cost-effective way to invest in commercial assets with added liquidity. Choosing fixed-interest loans mitigates the impact of rate fluctuations, while properties with solid resale value provide financial security. Lastly, focus on sustainable and tech-enabled developments, which align with future demand trends and command premium pricing, ensuring long-term success in a dynamic market.
India’s real estate market is increasingly attracting international investors. How can the sector stay competitive internationally with smart cities and urbanisation trends?
India’s real estate sector must leverage trends like smart cities and rapid urbanisation to remain competitive internationally. Prioritising sustainable development is a key project that integrates eco-friendly designs and renewable energy sources to appeal to global investors focused on ESG (Environmental, Social, and Governance) criteria. Adopting smart technologies such as IoT, AI, and green building innovations will enhance property value and cater to modern urban demands. Investment in infrastructure, including efficient transport, utilities, and digital connectivity, supports urbanisation and improves livability, attracting global interest. Regulatory stability, such as enhanced RERA enforcement and streamlined FDI processes, assures transparency and investor confidence. Promoting REITs and fostering private-public partnerships (PPPs) for large-scale developments can also attract foreign capital. Marketing India’s potential through global real estate expos will position the country as a premier investment destination.
Finally, being at the helm of ANAROCK, you’ve witnessed firsthand the ups and downs of the real estate industry. What are the most important lessons you’ve learned throughout your career?
Transparency and regulation are crucial. RERA and GST demonstrated that accountability fosters consumer trust. Market cycles are inevitable, emphasising the need for financial prudence and diversification. Location remains vital, with Tier 2 and 3 cities proving their growth potential. The shift towards organised players and institutional investments underscores the importance of credibility and compliance. Adapting to changing consumer preferences, like the demand for larger homes and sustainable projects post-pandemic, is essential. Lastly, leveraging technology and innovation ensures resilience in a dynamic market, driving long-term growth and investor confidence.
