Realty developers positive on demand, keen on branded homes & plotted developments: Credai survey

• About 43% of the real estate developers said they expect stable demand in 2023, as per a survey by Credai, Colliers and Liases Foras.
  
  
• The most optimistic of developers, at 31%, believe that demand will increase by up to 25%.
  
  
• About 87% of the developers are willing to launch a new project in 2023.
  
  
• Developers are keen on branded residences and plotted developments.
  

A majority of real estate developers in India – at 74% – expect demand to either increase or remain stable in 2023, as per a survey conducted jointly by Credai, Colliers and Liases Foras.

While 43% of those surveyed expect stable demand, the most optimistic of them — at 31%, believe that demand will increase by up to 25%.

“During 2022, developers across the spectrum saw increased enquiries led by a continued inclination towards home ownership since the pandemic. The survey reveals that developers remain optimistic about the market,” said Harsh Vardhan Patodia, president of Credai National.

Half of the developers also said that recession will have a moderate impact on their business. “Homebuyers remain enthused about purchasing homes, despite rising interest rates. Developers too are focusing on launching projects that are aligned as per the needs of the homebuyers and are also formulating strategies to complete their pending projects and bring in demand-led supply,” said Ramesh Nair, CEO India, Colliers.

About 58% of the developers also expect housing prices to increase further, in light of volatile input costs, economic uncertainties and sustained inflation rates.

“We have also seen a marginal increase in property prices (in 2022). The market is likely to maintain the momentum that the sentiment survey re-affirms,” said Pankaj Kapoor, managing director, Liases Foras.

About 43% of those who participated in the survey said that their input costs have gone up by 10-20% in 2022, compared with the year before. An earlier report by Colliers too said that the cost of key construction materials jumped about 32% in three years.

Plotted developments & branded homes

Thanks to the positive sentiment, most developers in the survey are formulating strategies to complete their pending projects and bring in demand-led supply. Around 87% of the developers also said that they are willing to launch new residential projects.

Also, 51% of the developers who expressed a positive demand outlook are willing to explore new business models like plotted developments and branded residences. Higher disposable incomes and increased need for amenities and open spaces have pushed up demand for self-contained residential complexes, the survey said.

Branded residences are the clear favourites among developers as about 31% of the developers are willing to explore them. And, 19% of them are willing to explore plotted developments.

“Plotted developments are also becoming popular, especially in Tier II cities due to lower land rates and the flexibility they offer to homebuyers,” the report said.

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