18 December, 2023    

World Real Estate Dominates, Leaving Other Assets Behind but What about India

A staggering two-thirds of global net worth lies locked away in real estate, according to a new report from the management consulting firm McKinsey & Company. This stark statistic, revealed in their report The Rise and Rise of The Global Balance Sheet," highlights a significant imbalance in how wealth is distributed across different asset classes.

The report delves deeper, revealing that a mere 20 percent of global net worth finds its way into other fixed assets, such as infrastructure, machinery, and equipment. Notably, even intangible assets like intellectual property and patents hold a far smaller share of the global wealth pie.

All this is glittering but what about the Indian Real Estate Market? Let's find out!

A Journey of Growth, Affordability & Opportunities

India's real estate sector is a giant in motion, driven by a potent mix of economic growth, urbanisation, and a burgeoning middle class. This dynamic landscape offers a fascinating story of growth, affordability, and exciting opportunities for investors and homebuyers alike.

The Engine of Employment and Growth

The sector is a powerhouse of employment, ranking as the second-highest generator after agriculture. It plays a pivotal role in the nation's GDP, contributing an impressive 7.3%. This contribution is projected to reach a staggering 15.5% by 2047, making real estate a cornerstone of India's economic future.

A Tale of Cities: Residential Market Boom

The residential market is witnessing a phenomenal boom, fueled by rising incomes, urbanisation, and favourable government policies. The year 2023 saw a record high in home sales, reaching an all-time peak of Rs. 3.47 lakh crore. This translates to a remarkable 48% increase compared to the previous year. This surge is driven by a combination of factors, including rising affordability, reduced interest rates, and a growing appetite for homeownership among the younger generation.

Affordability Takes Center Stage

While affordability did face a temporary dip in 2022 due to rising interest rates, the JLL Home Purchase Affordability Index predicts a positive outlook for 2024. The report suggests that a 60-80 bps repo rate cut is expected, making home purchases more accessible for buyers. Cities like Kolkata, Pune, and Hyderabad are projected to remain highly affordable, attracting both first-time buyers and investors.

Beyond Homes: The Rise of Other Segments

While the residential market dominates the headlines, other segments like retail, hospitality, and commercial real estate are also experiencing significant growth. This growth is fueled by the ever-increasing demand for modern infrastructure to support the nation's thriving economy

  • Luxury Living: An Exclusive Market

    The luxury housing market is witnessing an unprecedented boom, with sales soaring by 130% in the first half of 2023. This surge signifies the growing wealth of India's elite and their increasing desire for high-end living spaces.

  • Investing in the Future: Government Initiatives

    The Indian government is actively propelling the real estate sector through various initiatives. The Real Estate Regulatory Authority (RERA) provides much-needed transparency and consumer protection, while the introduction of Real Estate Investment Trusts (REITs) opens up new investment avenues. Housing schemes like PMAY and SWAMIH are actively addressing the need for affordable housing, ensuring that the dream of homeownership becomes a reality for millions.

A Look Ahead

With a projected market size of USD 828.75 billion by 2028, the Indian real estate sector is poised for remarkable growth. The industry has overcome challenges like the pandemic and emerged stronger, demonstrating its resilience and adaptability. As the nation continues on its economic and social development journey, the real estate sector is set to play a pivotal role in shaping the future of India.

From booming residential sales to the rise of data centres, India's real estate sector is a vibrant tapestry of opportunities. This journey of growth and affordability promises a bright future for investors and homebuyers alike, making it a sector to watch closely in the years to come.

As India's real estate market continues its remarkable growth, having a trusted partner like Agarwal Estates by your side is crucial. With extensive experience, a deep understanding of the local market, and a commitment to providing exceptional service, Agarwal Estates is here to guide you through each step of your real estate journey, be it buying, selling, or investing.

Whether you're a first-time homebuyer seeking affordable options or a seasoned investor exploring lucrative opportunities, our team of experts is dedicated to helping you achieve your real estate goals. Contact Agarwal Estates today and unlock the exciting possibilities that await you in India's vibrant real estate landscape.

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