'Real' Challenges Ahead of 'Estates'

Before the pandemic hit like a bolt from the blue, the real estate markets across the country were on a trip to mars. The prices were so high that people who worked in the city's heart started settling down in the outskirts, expanding the civic infrastructure and often forming new satellite cities. The pandemic had an extinguishing effect on the flaring prices. The predictions were that the real estate industry would take a while to recover its lost charm. But the real estate industry, especially in Asia, has bounced back sooner than expected, despite the world moving toward a recession.

The global scenario, however, paints a different picture. For instance, in the US, the continuous increase in interest rates has led to project cancellations, while the UK saw property investment returns falling by 10.4 percent in 2022. Compared to this, the APAC region manifests excellent resilience. Indian real estate market projections are a great example. According to reports, 2023 is likely to be a year of expansion and growth for the Indian market. This will be largely defined by the economy's stability, solid end user residential demand, and infrastructure growth. However, the industry had a mixed reaction to the Union Budget 2023-24. While the announcements like enhancing the funds for PMAY to Rs 79,000 crore and increasing infrastructure spending look positive, the Reserve Bank of India (RBI) has recently increased the repo rate by 25 bps to 6.5 percent, which will have an immediate effect on your home loan EMIs. The builders were expecting deductions in home loan rates. It will be a tough battle for real estate organizations and a baptism of fire for the new entrants.