Government reforms in the last 10 years have boosted the Indian residential market and have made a huge difference to the completion of housing projects, according to a joint report by real estate property consultant Anarock and National Real Estate Development Council (NAREDCO).
Almost 44 per cent more units were completed in 2022 as compared to 2021. As of 2023, India saw completion of nearly 435,000 units in the top-7 cities, and going by the current rate, more than 531,000 units are expected to be completed in 2024. In comparison, the completion rate averaged around 250,000 units in the four year period from 2017-2021, the report said.
A surge in housing demand was also evident with over 2.82 million homes sold in the top-7 cities between 2014 and 2023. The period saw launch of over 2.93 million housing units, the report said.
Impact Of Government Reforms
According to the report, initiatives, such as the ‘Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund’ revived the hopes of Alternative Investment Funds (AIF) by completing approximately 26,000 homes between 2019 and 2023.
An additional 80,000 units are expected to be completed in the next three years. The government-backed SWAMIH (Special Window for Affordable and Mid-Income Housing) Fund also provides financial support to stalled affordable and mid-income housing projects that were struggling due to capital shortfalls. SWAMIH Fund boosted the growth of many ancillary industries in the real estate and infrastructure sectors, having successfully unlocked liquidity of more than Rs 35,000 crore.
The implementation of the Real Estate Regulatory Authority (Rera) helped dispose of 121,000 complaints till date, and thus proved to be instrumental in bringing transparency and accountability, the report said. During this period approximately 123,000 projects were registered across states.
The central government’s Pradhan Mantri Awas Yojana (PMAY) provided affordable housing for rural and urban populations, with approximately 11.86 million homes sanctioned under PMAY (Urban) scheme and 29.48 million homes under PMAY (Gramin) scheme till date.
The report also acknowledged the effect of demonetisation on the real estate industry as a whole. It led to the exit of morally-corrupt developers and led to major consolidation under stringent regulatory overhauls, the report said. Further, the government’s consistent push has boosted new classes of investment the real estate such as warehousing, data centres, co-living, senior living, and student housing, it added.
Anuj Puri, chairman, Anarock Group said in a statement: “The findings are convincing – housing demand and new supply in the top-7 cities have soared in the last 10 years, particularly after the pandemic, and housing sales are now aligned with new launches. Residential property prices have also registered significant demand-led growth across the top-7 cities. Over the last decade, average housing prices surged 25 to 60 per cent across these cities.”
Niranjan Hiranandani, chairman, NAREDCO, said in a statement: “A market size of $1 trillion is expected by 2030, up from $200 billion in 2021. This market size is expected to contribute 13 per cent to India’s GDP by 2025, making the sector a pivotal contributor to economic development, employment, and government finances.”
Pan-India housing inventory overhang dropped from 41 to 15 from year 2014 to 2023. Inventory overhang, also known as ‘Months of inventory’, is the estimated amount of time it takes to sell all of the current listings.
“Given that 2020 was the year of Covid-19 pandemic, it is more of an outlier. This is significant, considering the massive new supply added during this period,” the report said.
Looking ahead, factors, such as stable governance, favourable interest rates, job creation, and increased private sector investment will further bolster the sector’s growth prospects, the report further said.
