India's top real estate developer DLF will continue to focus on building luxury and premium projects as it finds it difficult to make profits in the popular affordable housing segment, a top company executive told Reuters.
DLF said on Wednesday it has sold out its luxury residential project in Gurugram near New Delhi in 72 hours, generating more than Rs 8,000 crore ($967 million) in sales, confirming a Reuters story from earlier this month.
Luxury housing is booming in India. A record 65,700 luxury housing units were sold in 2022, thanks to rising disposable incomes and a surge in demand after the Covid-19 pandemic, especially, developers say, for spacious apartments with conveniences like concierge services and spas.
This growing demand from consumers wanting to upgrade their homes and splurge more is a key reason why DLF will continue to focus on the luxury housing space, Chief Executive Officer Ashok Kumar Tyagi told Reuters in an interview.
"We've been strong in this premium luxury, super luxury segment," he said.
"We've sort of made it very transparently clear that we are not into the truly affordable (segment) ... I think it's a great segment. But it's just that we don't find adequate ways of making it profitable for us."
Luxury condominiums, defined as those selling above Rs 1.5 crore ($183,000), accounted for 17 per cent of all launches in 2022, an at least five-year high, data from Anarock Property Consultants data shows.
On the other hand, launches of once-popular affordable homes — those priced below Rs 40 lakh — halved to 20 per cent of the total in the period.
DLF's Arbour project in Gurugram attracted more than 3,000 applications for 1,137 apartments priced at $869,000 each. Rival Godrej Properties is offering $3 million apartments to clients selected by invitation, Reuters has reported.
Tyagi added DLF would look at more luxury housing projects in big cities like New Delhi, Mumbai and Chennai, but declined to share further details on future plans.