NCR-Gurugram region to dominate India’s mid-housing and affordable housing markets in 2023

The government of India’s initiative to provide shelter to all needy people in India, is expected to sustain demand for mid-housing and affordable housing in the year 2023. India’s increasing population expected to reach 1.5 billion by 2023, has been one amongst the key factors behind governments continue commitment towards its cause of providing shelter to all needy people.

The fact about India expected to be second fastest economy globally in 2023 and 2024, is an indication that a sizable population would continue to experience increase in per capita income and also increase in number of middle and lower middle class population.

Reputed builders shall enjoy favour of buyers: Project completion and EMI payment was not the only thing in mind of buyers during the Covid-19 pandemic period. The aspiration of home buyers of providing their loved ones a better living place having ample facility for each age group member for the family also gain strength. Post COVID-19, the home buyers’ aspiration for quality living shall be a major decision factor in year 2023.

Real estate developers who have showcased ‘value’ to home buyers by providing amenities needed for quality living for a family across all ages, will surely experience an increase in customer recall value and enhance brand equity amongst home buyers in 2023.

Stronger demand outlook for affordable housing: In 2023, mid-housing and affordable housing demand in Gurugram region is expected to be much stronger due to multiple growth drivers such as:

(i) Expected increase in population: National Capital Region Planning board has projected the population of Gurugram to be 4.25 million in 2021 and 9.62 million in 2041 from 2.56 million in 2021 in its Draft Regional Plan for year 2041.

(ii) Better Infrastructure: With the commencement of Haryana portion of the Delhi-Mumbai industrial corridor (Sohna-Dausa) stretch and the Sohna elevated road, it is estimated that the real estate sector will witness robust development as these projects would improve the connectivity and access, create jobs and allow people to move with ease.

(iii) Emerged as the conceptual spine of the Delhi-Mumbai industrial corridor: NH48, connecting Delhi with Mumbai, houses several industrial clusters such as Gurugram, Manesar, Bhiwadi, Bawal, Neemrana and Ghilot, especially in the vicinity of NCR.

(iv) Developing as a key industrial hub: Gurugram-Manesar-Bawal belt is the largest automobile ecosystem in India, accounting for half of 4-wheeler manufacturing. Gurugram is an IT and startup hub, and home to more than half of the Fortune 500 companies. Neemrana hosts 55+ japanese companies in its successful japanese industrial township. FMCG, ESDM, and ceramic and glass are other notable sectors along the highway.

Eco–friendly building to gain prominence in 2023: Commitment of global leaders against climate change shall impact real estate sector in 2023. Emphasis will be towards implemented environmental-friendly building concepts with an aim to minimise net carbon impact. Lighting common areas with solar panels, LED lights, increase in the use of steel/aluminium powder coated UPVC doors and windows and high performance glass with light transmission that ensure better cooling and in-turn energy saving are some of the many initiatives which will become common in 2023.

Pradeep Aggarwal
Founder & Chairman, Signature Global (India) Ltd.

The only concern for home buyers is high home loan interest rate are here to stay over near to medium term. On December 5-7, 2022, RBI in its monetary committee meeting has increased the repo rate by 25-35 basis points. Bank as a result will eventually passes it on to home loan borrowers, the home loan EMIs will immediately rise as most banks do not have the option to extend the loan tenure anymore. We see high interest scenario to continue in 2023 too.

The only silver lining with reference to mid-housing and affordable housing is, both real estate developers and home buyers will continue to benefit from incentive policy introduce by government.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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