New Delhi [India], a survey by real estate association CREDAI and investment management firm Colliers found that most real estate developers expect tax rationalization, subsidies for affordable housing and single-window clearance from the Union Budget for 2024, which is scheduled to be unveiled sometime later this month.
Furthermore, according to the survey, developers expected that concession of input tax related to GST and reduction in interest rates could provide financial headroom to developers and improve the financial viability of real estate projects.
In the last 2-3 years, the real estate market has seen a surge in demand in tier I and II cities of the country and developers are optimistic that the momentum is likely to continue in 2024.
According to the Developer Sentiment Survey conducted by CREDAI and Colliers, during April-May 2024, about half of the developers surveyed are confident of buoyant residential demand in 2024.
Amid strong demand, around 52 per cent of developers surveyed across India expect house prices to rise in 2024. During 2023, median house prices in the country's eight major cities saw an increase 9 percent year-on-year.
The trend persisted in the first quarter of 2024 with a 10 percent year-on-year increase and is likely to continue for the rest of the year, albeit at an increasingly gentle pace.
"The survey suggests that current developer sentiment remains largely positive, with more than half of respondents feeling optimistic about sustaining current market dynamics in 2024. However, addressing rising costs construction and rationalization of taxes remain key expectations of the new government. and more than 50 per cent of developers are looking for constructive solutions for the same," said Boman Irani, president of CREDAI.
The Real Estate Developer Sentiment Survey 2024 report presented developers' assessment regarding the performance of the residential segment in 2023 and the likely trajectory of the real estate market in 2024. Responses from more than 550 respondents from 18 states were compiled and analyzed. India.
Here are some of the key results from the survey:
53 percent of developers believe inquiries and buyer engagement increased in 2023 compared to 2022.
45 percent of developers saw a 10 to 20 percent increase in construction costs in 2023 amid rising input costs.
About half of developers believe residential demand will remain stable in 2024, followed by 27 percent who believe demand will increase by up to 25 percent.
52 percent of developers surveyed expect house prices to increase in 2024.
25 per cent of developers are willing to explore parceled developments as an alternative business model, followed by branded residences, which were preferred by 21 per cent of developers.
More than 80 per cent of the developers believe that the demand for NRI residential properties will increase.
Almost 50 percent of developers want a significant reduction in costs, either through tax rationalization or a reduction in interest rates.
"With significant new launches over the past two years, unsold inventory levels have expanded; therefore, launches are expected to moderate in the near term. Developers are likely to carefully monitor market trends and be more strategic when launching new projects," Badal said. Yagnik, CEO, Colliers India.
Separately, commercial real estate services and investment firm CBRE is asking the government to reduce the GST on steel and cement, the two key inputs.
The construction industry, which has seen rising construction costs in recent years, got some respite in 2023 as prices cooled. In 2023, a gradual drop in material prices led to a gradual reduction in costs.
CBRE further stated that there is a demand to reduce TDS rates in coworking spaces as the majority of customer receivables are for services.
"The expectation is to bring coworking spaces to 2 per cent TDS, as in the case of services, from the current 10 per cent. This will greatly help the coworking space segment in managing its cash flows," Anshuman magazine said. Chairman and CEO: India, Southeast Asia, Middle East and Africa.
Furthermore, according to the survey, developers expected that concession of input tax related to GST and reduction in interest rates could provide financial headroom to developers and improve the financial viability of real estate projects.
In the last 2-3 years, the real estate market has seen a surge in demand in tier I and II cities of the country and developers are optimistic that the momentum is likely to continue in 2024.
According to the Developer Sentiment Survey conducted by CREDAI and Colliers, during April-May 2024, about half of the developers surveyed are confident of buoyant residential demand in 2024.
Amid strong demand, around 52 per cent of developers surveyed across India expect house prices to rise in 2024. During 2023, median house prices in the country's eight major cities saw an increase 9 percent year-on-year.
The trend persisted in the first quarter of 2024 with a 10 percent year-on-year increase and is likely to continue for the rest of the year, albeit at an increasingly gentle pace.
"The survey suggests that current developer sentiment remains largely positive, with more than half of respondents feeling optimistic about sustaining current market dynamics in 2024. However, addressing rising costs construction and rationalization of taxes remain key expectations of the new government. and more than 50 per cent of developers are looking for constructive solutions for the same," said Boman Irani, president of CREDAI.
The Real Estate Developer Sentiment Survey 2024 report presented developers' assessment regarding the performance of the residential segment in 2023 and the likely trajectory of the real estate market in 2024. Responses from more than 550 respondents from 18 states were compiled and analyzed. India.
Here are some of the key results from the survey:
53 percent of developers believe inquiries and buyer engagement increased in 2023 compared to 2022.
45 percent of developers saw a 10 to 20 percent increase in construction costs in 2023 amid rising input costs.
About half of developers believe residential demand will remain stable in 2024, followed by 27 percent who believe demand will increase by up to 25 percent.
52 percent of developers surveyed expect house prices to increase in 2024.
25 per cent of developers are willing to explore parceled developments as an alternative business model, followed by branded residences, which were preferred by 21 per cent of developers.
More than 80 per cent of the developers believe that the demand for NRI residential properties will increase.
Almost 50 percent of developers want a significant reduction in costs, either through tax rationalization or a reduction in interest rates.
"With significant new launches over the past two years, unsold inventory levels have expanded; therefore, launches are expected to moderate in the near term. Developers are likely to carefully monitor market trends and be more strategic when launching new projects," Badal said. Yagnik, CEO, Colliers India.
Separately, commercial real estate services and investment firm CBRE is asking the government to reduce the GST on steel and cement, the two key inputs.
The construction industry, which has seen rising construction costs in recent years, got some respite in 2023 as prices cooled. In 2023, a gradual drop in material prices led to a gradual reduction in costs.
CBRE further stated that there is a demand to reduce TDS rates in coworking spaces as the majority of customer receivables are for services.
"The expectation is to bring coworking spaces to 2 per cent TDS, as in the case of services, from the current 10 per cent. This will greatly help the coworking space segment in managing its cash flows," Anshuman magazine said. Chairman and CEO: India, Southeast Asia, Middle East and Africa.
