Majority of builders expect housing prices to rise further in 2023

Around 58 per cent of developers expect housing prices to increase this year because of rise in input costs, while 32 per cent builders feel it will remain stable, according to a survey.

According to the 'Real Estate Developers Sentiment Survey', by Realtors apex body CREDAI, real estate consultant Colliers India and property research firm Liases Foras, 43 per cent of developers expect residential demand to remain stable in 2023, while 31 per cent feel the demand would increase up to 25 per cent.

As many as 341 real estate developers from various parts of the country participated in the joint survey conducted during the last two months.

"An overwhelming 58 per cent of the developers feel that housing prices are likely to rise in 2023 amidst volatile input costs, economic uncertainties and sustained inflation rates," the report said.

However, the survey revealed that about 32 per cent of the developers believe that the prices will remain stable in 2023.

Housing prices have been on the rise over the last few quarters, led by robust housing demand as well as rise in input costs, the report said.

The survey report also showed that 43 per cent of developers saw a 10-20 per cent rise in project costs in 2022 amidst rising input costs.

As per the survey, the developers want 'ease of doing business' from the government.

"Homebuyers remain enthused about purchasing homes, despite rising interest rates," Colliers India CEO Ramesh Nair said.

Real estate developers too are focusing on launching projects that are aligned as per the needs of the homebuyers, Nair said, adding that builders are also focusing on completing their pending projects and bringing in demand-led supply.

The survey findings showed that almost half (46 per cent) of the developers believe that a probable recession will have a moderate impact on their business.

As much as 31 per cent expect minor impact, while 15 per cent believe severe affect.

CREDAI president Harsh Vardhan Patodia said, "The previous year provided the much-needed impetus and led to record-breaking sales in the last decade."

More than 70 per cent of the respondents believe the demand for home ownership to either increase or remain stable in 2023.

"With such sentiment, most of the developers in the community (87 per cent) are looking to expand their offerings and the year is likely to see a surge in new launches equal to the current supply under construction," Patodia said.

Rising population, wealth growth, and rapid urbanisation are the key influencing factors driving the sector's growth, he added.

"2022 witnessed the highest-ever sales and new launches across major cities in India.

"We have also seen a marginal increase in property prices.

"The market is likely to maintain the momentum that the sentiment survey re-affirms," said Pankaj Kapoor, managing director, Liases Foras.