Institutional Investors Take A Back Seat As Investments In Residential Real Estate Stumble By 72%

The Indian real estate sector which witnessed some good news with the surge in real estate (registration) number from Mumbai, has some bad news to bare with. A new report suggests that institutional investors may not been that keen on the Indian real estate arena.

According to Colliers India, the overall investment in the Indian real estate sector dropped 40 per cent in the January-March quarter. In broader terms, inflow in the sector dropped from USD 1,658.3 million in Jan-Mar quarter in 2023 to USD 995.1 million in the first quarter of the calendar year in 2024. This in turn means, that there is a deficit of about USD 663.2 million.

This report points at the decline across the board, from residential, warehousing to office spaces.

Amongst the aforementioned facets, growth or lack of it in residential assets appear to be the biggest concern for stakeholders in the segment. This, as the segment saw a steep fall of a massive 72 per cent in its prospects in this cycle. In 2023, residential assets saw an influx of USD 361.1 million, compare that to the numbers this year, at USD 102.6 million, it paints a concerning picture.  

Inflow in Freefall

This report is in tandem to the slump observed in the Delhi-NCR region. According to reports, the bustling region, with a population of over 2 crore saw a drop of 9 per cent in sales in the first three months of 2024. Gurugram in particular, slumped by 19 per cent. In fact, major constituents of the NCR precinct, baring Noida, saw a slump in their sales in the first three months of this new year.

Meanwhile, as according to another report, Mumbai, one of the most exorbitant and important real estate markets in the country saw an eight per cent jump in registration in just March alone.

When we look at other cities, the likes of Hyderabad and Pune accounted for 26 per cent of the total investments each, while Bengaluru contributed 20 percent of the inflow of funds.

This also comes at an interesting time, as we are in an election year, the prospects and the potential for change in prospects of the industry post the elections cannot be ruled out.