Real estate investors should start seriously looking at the Indian housing market. In 2024, one city in particular will boom.
After the terrible years of the pandemic and the 2023 financial downturn, it seems India is ripe for an economic miracle. Investments in India have skyrocketed, with the real estate market in particular set to grow significantly in 2024.
The best moment to conduct any investment is at the start of an upward drive. Investors who profited from the 2008 crisis, for example, entered the market in 2009, when the global economy started to recover.
Let’s see why and where to invest in the Indian real estate market.
Will house prices increase in India?
In 2023, the Reserve Bank of India (RBI) increased interest rates to 6.50%, more than its peers in the Eurozone and the United States. Nevertheless, housing demand remained stable (not surprising in a country of 1.4 billion) and recently started rising again.
The economy appears very resilient despite rate hikes. The International Monetary Fund (IMF) recently raised the GDP forecast to 6.3% growth in 2023, the highest among the top 5 world’s largest economies.
According to 360realtor, inflation in India is under control. As a matter of fact, the consumer price index dropped a stunning 1.8% month-over-month in September, down to 5% annually.
In this context of a healthy economy and market optimism, house prices will certainly rise as new investments come into the country. According to a Reuters poll, house prices will rise 7% in 2023 and 2024.
Such a stable growth will ensure, according to some analysts, that the real estate market will make up 20% of India’s GDP by 2030, and expand to $5.8 trillion in overall value by 2047.
Where to invest now?
Most of this real estate market growth in India will be driven by the construction of new properties, especially as the quality of life in the country increases.
One city in particular stands out for immediate investments: Mumbai. Housing demand in the West Indian megalopolis is skyrocketing, and prices are expected to rise 5.2% annually.
Most of this will go into the construction of suburban neighborhoods on the outskirts of the city. Globally, the only other cities where house prices are expected to rise more than Mumbai are Shanghai, Miami, Manila, Tokyo, and Dubai.
All of these cities (except Manila) are sprawling urban environments and prices are driven by the lack of offer rather than successful urban development.
After Mumbai, other cities that will likely see improved housing development will be Bengaluru and New Delhi, India’s capital city.
