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74% of developers expect demand to increase or remain stable, reveals CREDAI-Colliers-Liases Foras

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About 62% of the developers feel that buyer enquiries and engagement have increased in 2022 compared to 2021

 

India, 16th January 2023: As per the Developer Sentiment Survey conducted by CREDAI, Colliers, and Liases Foras, about 58% of the developers pan India expect housing prices to increase further in 2023. The rise in prices is likely to be led by robust demand for homes in the Indian market and at the same time, volatile key input costs. The Colliers-CREDAI-Liases Foras joint report on Real Estate Developers’ Sentiment Survey 2023, explores different perspectives of developers on how the residential sector spanned out in 2022 and which transects the sector is likely to take in 2023.

Raw material costs have surged significantly in the last two years due to global supply chain disruption, which has led to inflationary pressures. About 43% of the developers saw a 10-20% rise in project costs in 2022 compared to 2021 amidst rising input costs. This is in line with Colliers’ construction cost Update: November 2022, which states that the cost of key construction materials has jumped about 32% in a span of three years. This has led to increased costs of construction for the developers.

 “The previous year provided the much-needed impetus and led to record-breaking sales in the last decade. Hence, more than 70% of developers believe the demand for home ownership will either increase by 25% or remain stable in 2023. With such sentiment, most of the developers in the community (87%) 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. Rising population, wealth growth, and rapid urbanisation are the key influencing factors driving the sector's growth. Hence, to help maintain the momentum, almost 40% of developers anticipate improved ease of doing business from the government in 2023, while another 31% anticipate rationalization/income tax credit GST.”

said Mr. Harsh Vardhan Patodia, President of CREDAI National

“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. About 43% of the developers feel that residential demand would remain stable in 2023. 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, Chief Executive Officer | India & Managing Director, Market Development | Asia, Colliers.

Key survey results -

62% of the developers feel that buyer enquiries and engagement have increased in 2022 compared to 2021.

43% of the developers feel that residential demand would remain stable in 2023, followed by 31% who feel that the demand would increase up to 25%

43% of the developers saw a 10-20% rise in project costs in 2022 amidst rising input costs

31% of the developers are willing to explore plotted developments as an alternative business model, followed by branded residences preferred by 19% of developers

About 39% of the developers also hope for better ease of doing business from the government in 2023 and another 31% expect rationalization/ Income tax credit GST

Almost half of the developers believe that a probable recession will have a moderate impact on their business

Source: Colliers, CREDAI, Liases Foras

“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.

Branded residences – a clear favourite among developers

Branded residences have emerged as a clear favourite among developers as about 31% of the developers are willing to explore plotted developments as an alternative business model, followed by branded residences were preferred by 19% of developers. Higher disposable incomes and an increased need for best-in-class amenities and open spaces have pushed up demand for self-contained residential complexes. Plotted developments are also becoming popular, especially in tier II cities due to lower land rates and the flexibility they offer to homebuyers.

Next year is likely to see a spurt in new launches, as around 87% of the developers are willing to launch new residential projects in 2023. This cements the optimism among developers despite inflationary pressures and any potential slowdown. However, developers are likely to adopt a wait-and-watch approach to see how the economy, job freezes, and layoffs pan out over the next few months.

‘Ease of doing business’- a top ask from developers

As per the survey, ‘Ease of doing business’ is developers’ top expectation from the government. In the Union Budget last year, the government announced the launch of ‘Ease of doing business 2.0.’ The sector expects further clarity and parameters over the index, including aspects such as single-window clearance.

***

Media Contact:            

Sukanya Dasgupta

Senior Director & Head, Marketing & Communications| Colliers India

Sukanya.dasgupta@colliers.com |+91 9811867682

 

Riddhi Vira

Manager, Public Relations | Colliers India

riddhi.vira@colliers.com| +91 9619776362

 

About CREDAI

The Confederation of Real Estate Developers' Associations of India (CREDAI) is the apex body of private Real Estate developers in India, established in 1999, with a vision of transforming the landscape of the Indian Real Estate industry and a mandate to pursue the cause of Housing and Habitat. Today, CREDAI represents 13000+ Developers across 221 city chapters in 21 states and plays an important role in policy formulation by representing the views of its members to various Ministries at regular intervals.

About Colliers

Colliers (NASDAQ, TSX: CIGI) is a leading diversified professional services and investment management company. With operations in 63 countries, our 18,000 enterprising professionals work collaboratively to provide expert real estate and investment advice to clients. For more than 27 years, our experienced leadership with significant inside ownership has delivered compound annual investment returns of approximately 20% for shareholders. With annual revenues of $4.6 billion and $92 billion of assets under management, Colliers maximizes the potential of property and real assets to accelerate the success of our clients, our investors, and our people. 

About Liases Foras

Liases Foras, founded in 1998, is the only non-brokerage real estate research company in India. Data and science form the core of its services, ranging from providing market intelligence and risk advisory to lenders and mortgage companies to providing development advice, best use, and valuations to developers, funds, banks, and corporations.

Liases Foras’s expertise lies in real estate pricing with a strong focus on understanding price dynamics and analyzing any underlying risks.

Liases Foras is well acknowledged as leading real estate research and analytics consultant. Their clients have been hugely benefited from the robust database on real estate markets in India. The database is built using data collected since 2003 and covers 60 cities across India.

Liases Foras has an organized and structured data source on real estate projects, developers & their trends in India, which is updated every quarter through a primary market survey.


Related Experts

Ramesh Nair

Chief Executive Officer | India

Managing Director, Market Development | Asia

Mumbai (Corporate Office)

Ramesh has over 24 years of experience in consulting across top-tier International Property Consultants (IPCs). As the Chief Executive Officer (CEO), India & Managing Director, Market Development, Asia, Ramesh drives Colliers India’s overall direction, strategy and growth. He is responsible for developing new client relationships, ensuring consistently superior levels of service delivery, and incubating new specializations. Having worked across diverse asset classes such as office, land, warehousing, industrial, retail, residential, data centers, and hotels advising leading domestic and multinational owners, investors, and occupiers, he aligns all business lines towards the firm’s strategy internally and externally.

He develops a country-wide growth plan, manages revenues, operating expenses, and profitability to drive results, identify trends, and take corrective action. Ramesh also creates our workforce to provide innovative future solutions and help clients define and deliver successful real estate projects of the highest quality. As Managing Director, Market Development, Asia, Ramesh uses his considerable industry experience to add value beyond the boundaries of India and develop services, expand client relationships, and attract other talented professionals to the company. Ramesh also serves on the Colliers Asia Executive Board.

Before joining Colliers, Ramesh served as the CEO & Country Head of JLL India, where he oversaw the work and outputs of ~12,000 professionals working across transactions, consulting, and annuity businesses. During his tenure, he successfully grew the company to record heights. Previously, Ramesh held other leadership positions at JLL, such as COO – India; MD - West India; South India Markets Head; India Head of Land; MD – Industrial; MD – Chennai; and MD – Hyderabad. Ramesh was one of the youngest International Directors and Country Heads of JLL globally. He has also been a member of the Asia Pacific Executive Board of JLL and the J8, a group of JLL’s eight most prominent countries in terms of profits and revenues globally amongst 80 countries.

Easily one of the most recognizable persons in real estate in India, Ramesh is one of the influential thought leaders in the Industry. He has written widely for prominent publications like the Times of India and Economic Times. He frequently appears on business shows across leading business channels such as CNBC.

A firm believer in the value of education, he has been a guest lecturer at prestigious institutes such as IIM Ahmedabad, IIM Kolkata, ISB Hyderabad, JBIMS, and SP Jain.

 

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