The 2022-23 fiscal year saw a powerful rebound in India's residential housing sector, fuelled by robust consumer sentiment and pent-up demand following the pandemic, reports RBI. After two years of irregular closures, housing project launches showed steady growth. While credit growth, particularly in housing and personal loans, signalled solid domestic household demand, housing inflation remained moderate, influenced by the evolving hybrid work culture. The RBI predicts a positive trajectory for the services sector in 2023-24.
Driven by eager buyers and a wave of robust consumer sentiment in the wake of the pandemic, the residential housing sector demonstrated a potent rebound in the fiscal year 2022-23, according to the most recent annual report by the Reserve Bank of India (RBI).
Throughout 2022-23, housing projects displayed sustained improvement, marking a recovery from two years of sporadic shutdowns. The RBI report observes, "After a temporary slowdown in the third quarter, housing sales regained their stride in Q4 (January-March) of 2022-23 and rose notably in H1 (April-September). As new projects outpaced sales, there was a rise in unsold inventory."
The report emphasized a surge in credit growth, particularly in housing and personal loans, indicating a steady surge in domestic household demand. From a year-on-year perspective, non-food bank credit experienced an expansion of 15.4 per cent in March 2023, a significant increase from the 9.7 per cent growth of the previous year.
Furthermore, personal loans observed a growth of 20.6 per cent year-on-year in March 2023, in contrast to 12.6 per cent from a year prior, with housing loans acting as the primary driving force. Housing loans, specifically, grew by 15 per cent in March 2023, compared to 12.9 per cent growth recorded in the same period last year.
The RBI report underscores that the swelling credit growth, especially in housing and personal loans, is a testament to the stable domestic household demand. It also anticipated a positive outlook for the services sector for the upcoming 2023-24 fiscal year.
The post-pandemic period has seen a revitalization in the real estate and construction sectors, with both the demand and supply of housing remaining strong. The RBI expects this trend to continue its strong performance into the current year.
Interestingly, despite the sector's robust growth, housing inflation remained tame, averaging at 4.3 per cent in 2022-23, a reflection of the subdued rental demand driven by the emerging hybrid work culture.
In conclusion, the potent resurgence in the residential housing sector showcases the resilience of the Indian economy and its ability to bounce back from crises. The steady domestic household demand, combined with the increased consumer confidence, holds promise for sustained growth in the housing sector in the upcoming years.
Advertisement
Facebook
Whatsapp
