Real estate developers are hopeful for a cut in RBI's repo rate to reduce home loan interest rates, providing relief to buyers. After witnessing a 21% average price rise in 2024, India's primary housing market may experience modest single-digit growth in 2025. Experts predict an increase in new housing supply as developers strive to meet demand. Fiscal incentives in the upcoming Union Budget are also anticipated to revitalize the affordable housing segment, which has seen a decline in recent years.
New home sales across seven major cities declined for the first time since the pandemic due to elevated prices and high borrowing costs. According to Anarock, sales fell by 4% in 2024 to 4,59,650 units, while new supply dropped by 7% to 4,12,520 units. This decline marked the first setback after three years of robust growth post-COVID, with a cumulative 31% growth in 2023.
Industry leaders like CREDAI and NAREDCO expect government initiatives to streamline policies and boost affordable housing. Suggestions include increasing the income tax deduction limit on home loan interest and redefining affordable housing norms. These measures could address policy roadblocks and encourage the sector's expansion, vital for economic growth as real estate remains India's second-largest employment generator.
Looking ahead, experts foresee continued consolidation in the sector, with demand shifting toward reputed builders. Big players are aggressively acquiring land to cater to urbanization needs and expanding their portfolios through partnerships. By 2047, the Indian real estate market is projected to grow significantly, reaching USD 5.8 trillion, driven by stable economic conditions and favorable government interventions.
Efforts to enhance land availability, reduce interest rates, and expand tax benefits will be critical for sustaining growth in India's dynamic real estate sector.
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