The Indian real estate sector has remained faithful to investor expectations despite the many ups and downs in the last couple of years, despite being time-tested and widely believed to be immune to market volatility. Positive expectations and upward momentum have shown to persist, and many experts believe that this will continue in the coming year. Commercial real estate funds are making their presence known in the market, as the prospect of earning a consistent passive income from safe real estate investments has piqued the interest of many first-time investors.
The overall picture of the Indian economy heading into 2023 shows only positive signs, including 8-9% overall growth, an expected increase in job creation, and a rebound from the recent stock market slump. All of this would eventually contribute to an increase in housing demand as more people enter the housing market. Aside from speculation, we know for a fact that the government has been planning and implementing infrastructure mega-projects like highways, new airports, metros, and so on, as well as major policy initiatives like ‘Housing for All’ and the Pradhan Mantri Awas Yojana.
It would be redundant to state the obvious in terms of how such factors drive quantitative and qualitative growth in real estate assets. Low-interest rates, according to experts, could also have a significant positive impact on the real estate industry, especially given the government’s recent rollout of numerous tax-related and other incentives aimed at potential home buyers, as well as the streamlining of mandatory bureaucratic work. The often-overlooked real estate markets stand to benefit the most from such positive developments, and home buyers are likely to profit handsomely.
We’re here to compare the statistics and give potential investors the most accurate and precise answer as to whether they should expect a buyer’s or seller’s market in 2023.
Let’s get prepared to help real estate buyers at every stage of their investment journey.
Both the seller’s and buyer’s markets have benefits and drawbacks. To help investors better understand both climates and determine which one they are currently facing, we must first provide a brief explanation of each.
If an investor finds themselves in a seller’s market, there will be insufficient available homes to meet buyer demand. In that case, sellers have the option to ask for a higher price, which they will almost certainly take advantage of. However, from the buyer’s point of view, it does not look so good, especially for those on a tight budget.
Similarly, buyers who encounter rising house prices frequently end up in bidding wars to secure the investment property they desire. The essence of a seller’s market is that investors may have to pay significantly more for the home they desire.
If an investor finds themselves in a buyer’s market, there will be far more available homes than buyers. One could argue that a buyer’s market is more appealing to investors than a seller’s market. In contrast to the seller’s market, available homes in the buyer’s market remain on the market for a longer period, requiring sellers to work harder to attract interested buyers.
Sellers do not have the freedom to set high prices for their homes in this scenario. Instead, it means they’ll have to be more willing to negotiate a lower price for potential buyers. Another important feature of a buyer’s market to mention here is the high market absorption rate. It indicates the number of months it will take to sell a home in a buyer’s market.
So, if you’re looking for a home and discover that the market absorption rate is greater than six months, you’re most likely in a buyer’s market.
The housing market, which drives growth and sustains the entire real estate economy, is set to have an extremely impressive and potentially record-breaking year soon. Residential sales have increased by a whopping 51% since the Covid-19 period. Prices are expected to rise by nearly 7.5% across India (4% to 6.5% in metropolitan cities), and several other economic indicators point to an increase. This is not to say that the real estate economy is perfect or without flaws, as many factors, such as rising mortgage rates, inflation, and building material shortages, could stymie growth. If these issues are limited in scope and localized, they are not serious and may even be benign. A growing economy, a return to pre-pandemic working conditions, and various government initiatives are all combined to create a very favorable environment for the real estate market’s prosperity in the coming years.
With the shifts in the economy and changing buying and selling patterns in the real estate market it could be a buyer’s market in 2023. A buyer should always be aware of the market situation and make their choices accordingly.
Even though investors have access to reliable and up-to-date information, we must leave room for speculation given the scope of the real estate market.
We’re talking about the possibility of the 2023 real estate market becoming a buyer’s market at some point we cannot have an exact derivation. Investors should be prepared for both scenarios and adapt to the market to take appropriate decisions.
Zen Elite in Kharadi is focused on customer satisfaction in both the scenarios. Whichever market runs in the industry customer is the priority and we promise to provide the best facilities and amenities so that customers experience a peaceful and happy life living in their homes.