India’s real estate sector, celebrated for its resilient growth trajectory in recent years, faces a potential slowdown due to the high base effect. This phenomenon, resulting from record-breaking sales volumes during the post-pandemic recovery, is likely to hamper the sector’s ability to sustain strong growth momentum. Industry experts indicate that while demand remains robust, the comparative growth percentages may appear subdued, creating a perception of stagnation.
The housing market has experienced unprecedented sales in the last few years, fuelled by low interest rates, increased disposable incomes, and pandemic-driven preferences for larger homes. However, this growth trajectory has set a challenging benchmark. Developers are now grappling with elevated expectations, as achieving incremental gains becomes increasingly difficult. For instance, the National Capital Region (NCR) and Mumbai Metropolitan Region (MMR) reported record-breaking sales in 2022, making 2023’s performance appear moderate in comparison.
From a civic perspective, the slowdown could affect urban expansion plans. Cities reliant on real estate development as a driver of infrastructure growth may see delays in projects aimed at enhancing urban living standards. Housing for mid-income buyers might also bear the brunt, as developers shift focus to luxury segments to sustain margins. The disparity in affordability and availability may widen, impacting the inclusivity of urban housing.
Sustainability remains a pivotal concern amidst this evolving landscape. With the sector aiming to achieve greener practices, high sales volume in previous years offered opportunities for incorporating eco-friendly technologies. A deceleration in growth could risk derailing these efforts, highlighting the need for a balanced approach that aligns sales with sustainable development goals.
