A growing number of investors looking for property in 2023 will move to Tier 2 and Tier 3 cities.
For India’s real estate market, 2022 was a year of a new high. Both home sales and new launches improved significantly, and this strong momentum will most likely last through 2023, with sales doing even better than in 2022, which were higher than in 2014.
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The Indian real estate market, which is tried and tested and widely thought to be immune to market volatility, has stayed true to investor expectations despite many ups and downs over the past couple of years. Positive expectations and rising momentum have demonstrated its ability to persist, and it will do so in the upcoming year.
Real estate in India has something for every type of investor, except for those who may be gamblers. Looking ahead to 2023, the general Indian economy shows what can only be interpreted as encouraging indicators, including a predicted increase in job creation of 8–9%, a rebound from the current stock market fall, and an 8–9% overall growth. All of these would ultimately lead to a rise in housing demand as more individuals enter the housing market, which is crucial for the health of the real estate sector.
In addition to policy programmes like “Housing for all” and the Pradhan Mantri Awas Yojana, the government has been planning and implementing mega infra projects like highways, new airports, metros, etc. Stating the obvious about how such factors promote both quantitative and qualitative growth in real estate assets would be unnecessary.
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Tier II cities & Connectivity
A growing proportion of investors looking for property in 2023 will move to Tier 2 and Tier 3 cities. Government programmes like the Smart Cities Mission and AMRUT have helped these cities become new economic hubs. We hope that Tier 2 cities will become excellent residential markets due to increased economic activity and job prospects. Along with government initiatives, several cities are home to Indian and global MNCs or are well-connected to the metro cities.
As more people move to Tier II and III cities, transportation becomes increasingly crucial for raising the standard of living for locals. The government’s initiatives to develop effective public transit will also increase demand for efficient real estate. Additionally, the government is concentrating on intra-city network projects, which further increases the potential of these cities. Some places will advance quickly, thanks to more IT-friendly legislation, which will spark an urban awakening.
SCOs in commercial
The Haryana government’s new planned colony policy has embraced the ground-breaking idea of a Shop-cum-Office (SCO) plot; it has been made available in several Gurugram neighbourhoods and invites private developers to participate. Due to these regulations, a new era of commercial SCO plots is emerging. The SCO markets have been a phenomenal success, and early investors’ capital has multiplied many times over. A prudent investor can profit from consistent cash flows, longer leases, and higher income, to name a few.
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The deciding elements for knowledgeable investors with a long-term investment horizon are the capital growth and greater rental yields brought on by the marketplace’s integrated ecosystem. The advantages of this setup over malls include 100% ground coverage, a leasable area that is more than the saleable area, freehold land, rentals multiplied by 5, and much less maintenance.
These SCO plots will help entrepreneurs develop their business concept or realise their desire to build a restaurant or use the area as an office. The advantages of a well-equipped environment supporting retail or office in a favourable market are recognised by astute investors. These shop-turned-office plots have seen a rise in demand in recent months. By offsetting changes in other, riskier asset categories, mixed-use commercial spaces will unquestionably help investors diversify the risk in their investment portfolio.
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Finally, as sales in various locations have increased significantly, it is clear that people now understand the significance of owning real estate assets. The good news from 2022 will continue into the next year, and we anticipate that some of the trends that started in 2022 will gain momentum in 2023.
