Luxury living ascends, affordable housing wanes in India's top 7 cities

Real estate shift: property market in India's top seven cities witnessed a notable shift in first quarter of 2024, with luxury properties gaining ground while affordable housing faced a decline.

According to recent data from Anarock, share of luxury homes priced above Rs 1.5 crore surged to 21 per cent, marking a substantial increase from 7 per cent recorded five years ago in same quarter. 

Meanwhile, affordable housing's share dwindled to 20 per cent from its previous robust position of 37 per cent.

Affordable housing shrinks

In Q1 2024, approximately 27,070 luxury homes were sold out of a total of 1.30 lakh units across top seven cities. This marks a threefold increase from sales figures five years ago, highlighting growing demand for upscale properties. 

Conversely, affordable segment witnessed sales of around 26,545 units, constituting a 20 per cent share of total sales in same period, down from 37 per cent in Q1 2019.

City-wise market trends

In first quarter of 2024, real estate sales across various segments and cities in India showed notable trends. National Capital Region (NCR) witnessed a total of 15,645 units sold, with affordable segment comprising 4,305 units, mid and high-end segment accounting for 5,280 units, and luxury segment seeing 6,060 units sold. 

Meanwhile, Mumbai Metropolitan Region (MMR) emerged as a significant hub with a total of 42,930 units sold, including 12,650 affordable units, 20,920 mid and high-end units, and 9,360 luxury units. 

Hyderab showcased a strong demand for mid and high-end properties, with 13,620 units sold in this category, contributing to a total of 19,660 units sold in city. 

Bangalore recorded sales across segments, totalling 17,785 units, with mid and high-end segment dominating at 12,950 units. Pune, with a total of 22,990 units sold, saw substantial sales in mid and high-end segment (16,860 units). 

Chennai and Kolkata h comparatively lower sales volumes, with Chennai recording 5,510 units sold and Kolkata witnessing 5,650 units sold. Nationally, real estate sector exhibited robust activity, with a total of 130,170 units sold, highlighting diverse market dynamics across different cities and segments.

Market challenges dressed

Anuj Puri, Chairperson, Anarock commented on trend, highlighting increasing popularity of luxury homes attributed to larger spaces and prime locations. 

He highlighted challenges faced by affordable housing sector, indicating a need for government interventions to stimulate demand and supply.

“As luxury homes gain more traction in both new supply and sales, affordable housing continues its retreat to sidelines. luxury segment is driven by a mounting appetite for bigger homes by branded developers in superior locations," Puri said. 

"Affordable housing, on or hand, is driven primarily by lower ticket sizes. downward spiral of this erstwhile posterchild of Indian housing industry began during pandemic, and n morphed into a broer malaise. Even as nation awaits results of ongoing general elections, any affordable housing revival will hinge on furr government sops and incentives for buyers and developers,” Puri ded.

Past to present: Real estate dynamics

shift in market dynamics is also reflected in new launches, with luxury housing projects accounting for 25 per cent of total launches in Q1 2024, compared to just 9 per cent five years ago. 

In contrast, share of affordable housing launches dropped to 18 per cent from 40 per cent in 2019.

Overall, real estate in India's top cities is witnessing a notable transformation, with luxury properties gaining momentum while affordable housing faces challenges requiring strategic interventions for revival.