Analyzing Real Estate Trends in the US and India

Navigating the evolving landscape of real estate in both the US and India in 2024 presents challenges amid economic shifts and geopolitical tensions.

This year holds potential opportunities within this complex terrain, characterized by global economic uncertainties, marked by a forecasted 2.4% global GDP growth slowdown. Notably, India stands out favorably due to robust investment and consumer spending.

Despite prolonged high-interest rates globally, real assets maintain their allure, hinting at a potential rebound in market transaction volumes by the latter part of 2024. This prospect lures selective re-entry from investors, particularly institutional players seeking to capitalize on emerging opportunities.

Within the real estate domain, various sectors exhibit divergent outlooks. While segments like hotels and hospitality show potential for recovery, the multifamily property market grapples with declining prices owing to oversupply. This intricate scenario is shaped by factors such as fluctuating interest rates, the impact of remote work trends, and the distinctiveness of specific sectors, painting a nuanced picture of the current US real estate landscape.

In the US, areas like the Super Sun Belt in the South and 18-Hour Cities continue to attract businesses, albeit facing challenges. However, smaller markets known as Supernovas, although appealing to educated young individuals, experience a growth deceleration.        

Contrasting the US, India's real estate panorama showcases unique dynamics. The residential market saw an unprecedented surge, marking record-breaking sales in the top 7 cities, driven by end-user purchases despite escalating interest rates.

India's top cities experienced a surge in average apartment prices, notably in the NCR region, witnessing substantial sales spikes in cities like Mumbai and Hyderabad. The sustained growth, particularly in Tier II and III cities, is attributed to government initiatives and evolving economic identities.

Despite variations in unsold inventory across segments and regions, cities like Bangalore and Hyderabad observed increased sales, reflecting a demand surge.

India's rental market depicts varied yields among major cities, influenced by work proximity preferences. India experienced a 20% nationwide rent hike, with significant increases in cities like Bengaluru, Hyderabad, Pune, and Mumbai, signaling investor interest post-pandemic.

Meanwhile, commercial office space activity witnessed minimal growth in supply and a slight decline in net absorption across the top 7 Indian cities in the first half of fiscal year 2024, differing from residential real estate trends.