India’s real estate market is experiencing an extraordinary transformation, with the highest sales in 15 years recorded in the first half of 2024. On an episode of Simple Hai!, a finance podcast hosted by veteran journalist Vivek Law, Anuj Puri, Chairman of Anarock Property Consultants, shared deep insights into the sector’s evolution—touching on investment trends, market cycles, and what makes this boom different.
A Changing Definition of Shelter
Post-COVID, the importance of having a secure and comfortable home has taken on new meaning. As Puri pointed out, the pandemic reshaped how Indians perceive “makaan,” one of life’s basic necessities. This shift in sentiment has led to a surge in housing demand, driving the market to historic highs in 2024.
From Chaos to Clarity: The Sector’s Evolution
Reflecting on his nearly four-decade journey in real estate, Puri reminisced about the pre-regulation days when the sector was marred by fraud and opacity. He cited personal memories—like his parents being defrauded in Delhi’s infamous Skipper Towers project—as evidence of the industry’s troubled past.
Today, however, real estate is far more structured. Reforms like RERA, GST, and consolidation have introduced governance and transparency, making it a safer domain for investors and homebuyers alike.
The Resilience of a Bull Market
Despite downturns in the past, Puri always maintained a positive outlook. He emphasized that every market—bull or bear—offers opportunities. In sluggish periods, commercial real estate, warehousing, and industrial spaces rise in relevance. The key, he said, is tracking the market’s pulse and adapting accordingly.
Financialization and the Rise of REITs
One major shift in real estate is its partial transformation into a financial product. While most residential purchases remain end-user driven, offices have become attractive investment vehicles. Puri outlined three categories of office buyers: end-users, rental income seekers, and REIT investors.
Real Estate Investment Trusts (REITs), introduced in India in 2018, have emerged as game-changers. With four major REITs totaling nearly ₹1 lakh crore in assets, they offer retail investors a chance to earn quarterly dividends and participate in commercial real estate through small investments. Puri also highlighted new instruments like Small Medium REITs and tech-enabled fractional ownership platforms.
The Luxury Surge and IPO-style Home Sales
Luxury real estate has seen exponential growth, particularly among High Net-Worth Individuals (HNIs). According to Puri, several factors drive this trend: COVID-induced lifestyle changes, stock market gains, rising incomes, and the availability of ready-to-move-in high-end properties.
Interestingly, many luxury projects are sold out within minutes of launch—though, as Puri candidly revealed, much of the groundwork is done months in advance. Checks are collected and banked strategically to create buzz and brand perception.
Millennials Are Buying Homes—Here’s Why
Contrary to the belief that Gen Z and millennials prefer renting, the average age of homebuyers has decreased from mid-40s to early 30s. Puri attributed this to several post-pandemic shifts: parental pressure, social stigma around renting, and unequal treatment in housing societies during COVID.
Renters were often subjected to stricter rules than owners, pushing many to seek ownership for dignity and stability. Despite the low rental yields (around 2% for homes), the long-term benefits of homeownership continue to attract young buyers.
Affordable Housing Still Holds Ground
While luxury dominates headlines, affordable housing remains stable. A comprehensive Anarock study revealed that between 2013 and 2019, property prices rose only 12%, or about 2% annually. From 2020 to mid-2024, prices jumped 48%. However, when averaged over the full 11-year period, price appreciation has lagged income growth—keeping affordable housing within reach.
The Institutional Edge: Why Big Builders Are Winning
Thanks to a wave of consolidation, fewer but stronger developers now dominate the market. Giants like DLF benefit from reduced competition, increased demand, and larger average unit sizes. The average home size has grown from 1,190 sq ft pre-COVID to 1,340 sq ft today.
These factors—combined with rising prices—have significantly boosted the performance and profitability of organized, often listed, developers.
Real Estate Cycles: What Lies Ahead?
Historically, bull markets in real estate last around six years, while bear markets last about four. Given that this bull run began in early 2021, Puri estimates we are three and a half years into the current growth cycle, with momentum likely to continue—barring macroeconomic shocks or global conflicts.
Work-Life Balance, Fitness, and Patience: Lessons from a Veteran
Beyond market dynamics, the episode touched on personal philosophy. Puri stressed the importance of fitness, likening health to a crystal ball that must never be dropped. He also debunked the myth of perfect work-life balance, emphasizing the value of quality time over quantity.
Patience, he said, comes from upbringing, entrepreneurship, and life’s lessons. For millennials used to instant gratification, cultivating patience is both challenging and essential.
A Profession Once Dismissed, Now Respected
Puri’s unconventional journey—from CA to Chartered Insurer to real estate broker—speaks volumes about foresight. Real estate brokering, once stigmatized, is now a professionalized, licensed industry, especially with RERA’s requirements for certification and ethical practices.
His mission? To leave a legacy in a sector where there was once no path. As India’s property market becomes increasingly organized and transparent, his vision is now the industry’s reality.
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