Realty sales highest since 2013, 4 lakh homes sold in 8 cities: Eco Survey

India's housing boom: Real estate dominates Indian household savings with highest allocation

India's household sector serves as a primary source of financial resources through savings, contributing a substantial 70% to the total gross domestic savings.  The growth in housing sales in cities has been particularly impressive, indicating that urban households are diversifying the deployment of their savings. 

Data from the Economic Survey shows that residential real estate sales across major Indian cities are at their highest since 2013! In 2023, a whopping 4.1 lakh units were sold in the top eight cities alone, reflecting a significant 33% increase compared to the previous year.  To meet this growing demand, developers are constructing more properties than ever before. In 2023, a record-breaking 5.2 lakh new housing units were launched, exceeding the previous year's figure by almost a lakh, showed data analysed by PropTiger. 

 

 The momentum hasn't slowed down. The first quarter (Q1) of 2024 witnessed a phenomenal 41 per cent growth in sales compared to the same period last year, with a record 1.2 lakh units sold.  Since mid-2022, the number of new housing units launched has consistently crossed the one lakh mark each quarter. 

Similarly, personal loans for housing have surged, corresponding to the increase in housing demand, noted the Economic Survey

Most households save in two ways - financial assets (like bank deposits, stocks, and mutual funds) and physical assets (like real estate, gold, and other durable goods), a global brokerage firm BofA Securities said in a report in May 2024.

 As of 2022, over half (56%) of household savings were in financial assets, which is double the amount seen a decade ago. This suggests a shift towards more diversified saving methods.  Despite the rise in financial savings, a large portion (77%) of household assets are still tied up in real estate.  

 On average, an Indian household holds 77% of its total assets in real estate, 7% in other durable goods, and 11% in gold.