What did I learn about Real Estate in India in 2024?

I will not be stating the obvious in this article. We all know what real estate is, how it can impact and change lives, and how it is emerging as the new favorite of the middle class in India for generating wealth.

Real estate in India, undoubtedly, has the potential to turn around India’s economic pace on the global front.

I knew what I was getting into when I finally decided to become a practicing real estate agent in January 2024. I studied and worked for agents around the world and in India for about 2 years, assisting them with their marketing and sales. I also learned about how the real estate industry works in India, and how it’s different from the rest of the world, especially the globally forward countries like USA and Dubai.

This article is my understanding and learning about Real Estate in India in 2024. The shifts in the market trends, the growing participation of retail investors, and how real estate in India is pacing with the rest of the world.

So, without any further ado let’s begin.

Shift of Interest from Tier-I to Tier-II Cities

Traditionally, real estate in India was focused around major economic zones, or as they are more commonly known as Tier-I cities. These include Mumbai, New Delhi, Jaipur, Gurugram, Bangalore, Ahmedabad, and Hyderabad.

These Tier-I cities were preferred by institutional investors and traders primarily for their potential to attract immigrants from other cities and even countries. Since these cities are the economic hotspots in the country and attract immigrants in search of a better life, the demand for real estate was sky-high.

However, all this has changed since the 2020 Pandemic.

Now more than ever, Tier-II cities like Chandigarh, Mohali, Panchkula, Goa, Lucknow, Ludhiana, and many more are seeing rapid increases in real estate appreciation.

According to a report by Hindustan Times, “Housing sales across top 30 Tier II cities increased 11% annually to nearly 2.08 lakh units during the last fiscal year”.

In the last couple of years, there has been an increase in economic activities in these cities. Many small and medium enterprises have set up their offices in Tier-II cities, sparking an increase in migration of the workforce.

This increased economic activity, paired with lower property prices and government-backed infrastructure developments is creating value for homebuyers who are seeking to climb up the socio-economic ladder.

The rest is obvious; investors follow where the homebuyers move, hence the increased downpour of investments in these cities.

Real Estate Trading is a Real Thing

It surprises me to know that a lot of real estate investors are unaware if trading in real estate is a thing.

In my tenure as a real estate agent in the country, regardless of how small it is, I've come across several investors who want to make quick money but are skeptical of the process. Even more surprising is the fact that they fear taking the risk.

I've come to realize that property appreciation doesn't work unless there's a fair trade.

To put this into perspective, think of real estate assets as just another commodity. The more hands are exchanged, the more likely it is to appreciate and get returns to the investors.

Not to mention, the early investors and traders make the most out of the trade.

In case, you need any assistance investing in pre-launch projects in Chandigarh-Mohali-Panchkula, contact us or mail us at dailypropertydiscussions@gmail.com.

There are plenty of pre-launch projects waiting for investors to pour in money and make profits. Reputed builders in the Tricity region, like SBP, Acme, MMM Infra, Amayra Group, and many more are offering several options for traders and investors to make quick money without having to put down a lot of capital.

Homeownership Struggles of the End User

Investors are making a lot of money in real estate in India, which is a good thing. However, as a coin has two sides, so does this increasing interest of investors in real estate in India.

As per a report published in Economic Times, “The price-to-income ratio, a key indicator of affordability, has risen from 6.6 in 2020 to 7.5 in 2024, indicating that housing has become less affordable as property prices have outpaced average income growth”.

There’s no doubt to it that trading in real estate helps increase its value, but it also makes it difficult for the end user to buy the home. Eventually, this could result in a domino effect tumbling down the blocks of the real estate economy in the county.

In addition to this problem, the current home buyers’ generation is also under pressure to buy a better home.

Consider this, the Baby Boomers had huge residences where they could raise their joint families. It is because they had the opportunity and resources to buy real estate cheaply.

However, this is not the case for the Millennials and Gen-X. Due to the increasing price-to-income ratio, they cannot afford huge houses, and the ones they can, do not satisfy their social needs. So they are stuck in a continuous tussle between affordability and necessity.

Conclusion

The real estate market in India has been a dynamic landscape through 2024 with promising opportunities for the investors on one side and affordability challenges for the end users on the other.

To ensure the long-term sustainability of the sector, it's important to find a balance between catering to investors’ interests and ensuring homeownership remains accessible to the average Indian homebuyer.

Some possible solutions to address affordability concerns may include government intervention and alternative housing models.

The government is introducing policies to incentivize affordable housing projects and regulate excessive price hikes. Pradhan Mantri Awas Yojana is an example of the same.

On the other hand, developers also need to focus on co-living spaces, student housing, and rental models within the mid-range housing segment. After all, without the end users, even the investors would back out eventually.

By implementing these solutions and fostering a collaborative approach between all the stakeholders, real estate in India can achieve long-term sustainable growth.