Should You Buy Property In 2023?

It always pays to invest in your own house. But if you are looking at realty as an asset class. commercial property, REITs and fractional ownership may be the way out.

- By Aprajita Sharma

REAL ESTATE as an asset class may not have performed well for nearly a decade, but the sentiment is changing for good. While the world is heading into a recession, the Indian economy is set to grow at an estimated 6.9% in FY23. With increasing urbanisation and demand for office space, real estate looks set to cash in on the growth boom. According to CRISIL estimates, the sector is likely to grow to ₹65,000 crore by 2024 from ₹12,000 crore in 2019, and contribute 13% to the country's GDP by 2025. While some have already joined the party post Covid when borrowing rates had hit decadal lows, the interest rate cycle has changed now. So, should you still buy a property in 2023? "In India, home prices stayed flat between 2015 and 2020," says Amit Goyal, CEO, India, Sotheby's International Realty. "In the last two years, the sector has clocked robust sales due to pent-up demand, stable prices, benign interest rates and government incentives... In fact, housing sales across the top eight cities in 2022 are expected to breach the previous peak of 2014, going by the momentum in sales during the festive period and the first three quarters of the year. Prices in good localities are up by 7-15%. The next five years could be positive for investors who buy the right kind of property,” he adds.

According to the Housing Price Tracker Report, 2022, prices across the top eight cities in India — Delhi-NCR, Mumbai Metropolitan Region (MMR), Kolkata, Pune, Hyderabad, Chennai, Bengaluru, and Ahmedabad — grew 6% year-on-year in Q32022 amid robust demand and launches by top developers. Delhi-NCR saw the highest increase in residential prices at 14% YoY, followed by Kolkata and Ahmedabad at 12% and 11%, respectively.

Rising Interest Rates