What are the best places to buy property in 2024? G. Hari Babu of NAREDCO says luxury property will continue to be demand in 2024

In 2023, the real estate sector in India experienced a remarkable surge in demand for premium and luxury properties, especially in metropolitan areas, reflecting the evolving preference for more spacious homes. G. Hari Babu, National President of the National Real Estate Development Council (NAREDCO), an industry association for real estate in India, discusses with Teena Jain Kaushal the trends expected in 2024 and where to invest in the upcoming year. Edited excerpts:

BT: How did the real estate market perform in 2023? 

G. Hari Babu: In 2023, the Indian real estate sector witnessed unparalleled growth, registering substantial advancements in both residential and commercial segments nationwide. Notably, premium and luxury properties experienced a remarkable surge in demand, particularly in metropolitan areas, aligning with the evolving preferences for more extensive living spaces. A standout was the Delhi-NCR region, where luxury housing sales saw an impressive surge of 216%, driven by positive economic indicators and increased investments from Non-Resident Indians (NRIs). The strategic expansion into Tier-2 and 3 cities, with the acquisition of 1,461 acres for residential developments, underscored the sector’s adaptability to the shifting dynamics of non-metro markets.

BT: How is the property market expected to perform in 2024? 

G. Hari Babu: India’s real estate sector experienced an unprecedented surge in 2023, fuelled by robust economic performance, setting the stage for continued growth in 2024. The momentum from the previous year, particularly in high-end transactions in Delhi-NCR, is anticipated to persist. The demand for spacious and luxurious residences remains high, and developers, cognizant of evolving buyer preferences, are well-positioned to capitalise on India’s appeal as a global investment destination. As developers explore untapped growth areas, 2024 is expected to bring dynamism to the real estate landscape, with substantial returns on investment.

BT: What are the best places to buy property in 2024? 

G. Hari Babu: In 2024, NCR cities like Gurugram, Faridabad, and Noida should be on investors’ radar. Prime locations such as Dwarka Expressway and sectors near Yamuna Expressway and Jewar Airport offer substantial potential for high returns. Among other major cities, Hyderabad, with around 44,220 housing units worth approximately Rs 35,802 crore sold in the first nine months of the year 2023, has emerged as a new realty hotspot. The city has clocked a rise of around Rs 10,000 crore or approximately 43 per cent increase when compared to the same period last year and is posed to offer high returns in 2024. Mumbai Metropolitan Region (MMR) exhibited maximum sale and topped the list with approximately Rs 163,924 crore worth of inventory (around 111,280 units) sold in the first nine months of 2023. It was followed by National Capital Region (NCR) cumulative sales value of Rs 50,188 crore (approximately 49,475 units) sold in this period.

BT: Has high home loan rate slowed down property market demand? 

G. Hari Babu: While the luxury real estate market is less affected by high interest rates, the decision to maintain the repo rate has reduced uncertainty, benefiting the resilient economy. However, concerns persist for affordable housing, particularly in Tier 2 and 3 cities, where high interest rates impact growth. Homeownership remains a challenge for the masses.

BT: How has the affordable segment performed in 2023, and are more incentives needed?

G. Hari Babu: Except for a few areas like Raj Nagar Extension in Ghaziabad, affordable housing is scarce in major Tier 1 cities. While gaining traction in Tier 2 and 3 cities, it remains out of reach for the masses. The Urban Infrastructure Development Fund (UIDF) is a positive step, but proactive government intervention and incentives are necessary to reduce input costs and bolster the affordable housing segment.

BT: Will the luxury property market continue to be in focus in 2024?

G. Hari Babu: The real estate sector in India experienced unprecedented growth in 2023, with the luxury housing segment attracting significant attention. Projects with prices exceeding 1.5 crore, offering not just homes but lifestyle statements, led the surge. This trend, driven by a preference for spacious apartments of 2,500 sq ft or more, aligns with new premium offerings from developers. As we move into 2024, the momentum in the premium housing segment is expected to persist, promising continued growth.

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BT: What are some of the challenges that real estate market is still grappling with?

G. Hari Babu: The real estate market faces challenges such as increased land prices, high input costs, elevated interest rates, construction bans due to GRAP, and obstacles in land acquisition.

BT: What advice do you have for home buyers stuck in under-construction projects with bankrupt developers? Should they sell or wait longer for project completion? 

G. Hari Babu: In such unfortunate situations, selling is not advisable. The government’s proactive measures, inviting private and government developers to complete stalled projects, indicate a positive shift. Despite the slow process, waiting for project completion is recommended for affected buyers.