The Indian real estate industry is navigating its way back to stability after facing significant challenges over the last two years. Harsh Vardhan Patodia, President of the Confederation of Real Estate Developers’ Association of India (CREDAI), highlighted the ongoing recovery, describing it as “K-shaped.”
The sector faced severe disruptions during the pandemic, including supply chain breakdowns, labor shortages, halted construction, and budget constraints. Construction costs surged amid inflationary pressures, while the Russia-Ukraine crisis and rising interest rates further exacerbated difficulties. Despite these hurdles, builders have adapted, signaling signs of recovery in the market.
“The momentum of India’s real estate business was thrown into disarray due to COVID-19,” Patodia said. “Yet, the Indian economy has shown resilience over the past one and a half years, thanks to timely government interventions.”
Recent measures by the Indian government, such as reduced import duties on steel and iron products, have provided relief to the realty sector. These actions have improved the availability of raw materials, tempered rising costs, and bolstered consumer confidence.
“Reducing import duties on steel products and intermediaries has strengthened the supply chain, enabling projects to proceed more cost-effectively. This will have a positive impact on consumer sentiment and market stability,” Patodia added.
Patodia noted that housing sales rebounded in 2021, reaching more than 90% of pre-pandemic levels seen in 2019. The top seven cities recorded sales of 2.36 lakh units during the year, with the fourth quarter alone achieving a 28-quarter high of 90,000 units sold.
Key factors such as low home loan rates, stable prices, and anticipation of price hikes drove this resurgence. This led to a consistent decline in unsold inventory from Q2 2020 through Q4 2021. However, the third wave of COVID-19 and a surge in project launches in early 2022 caused unsold inventory to rise slightly by 1% quarter-on-quarter, reaching approximately 9,00,000 units pan-India.
The Mumbai Metropolitan Region (MMR) accounts for the largest share of unsold inventory, followed by Delhi NCR and Pune.
Real Estate Remains a Preferred Investment
Despite the challenges of the past five years, the real estate sector continues to be a favored investment option for Indians. Patodia emphasized the resilience and adaptability of the industry, citing its ability to weather economic disruptions and meet evolving consumer needs.
As the sector charts its path forward, the focus remains on addressing supply-demand gaps, enhancing affordability, and sustaining positive momentum in sales.
