Representative image of a luxurious house.
Credit: iStock Photo
Bengaluru: Demand for luxury housing (read: priced Rs 4 crore and above) has scaled new heights this calendar year. According to a report by property consultancy CBRE India, released on Wednesday, the segment saw a sale of 9,200 units between January and September, making for a 97 per cent year-on-year growth.
Rapid urbanisation, improved affordability, the rising aspirations of resident Indians and the higher return-on-investment value perceived by non-resident Indians are some of the reasons behind this robust demand, observed Aakash Ohri, Joint Managing Director and Chief Business Officer at DLF Ltd.
“India’s fairly stable economy as compared to the global recessionary climate, availability of opportunities, business prospects, and higher disposable income added up to the reasons for the bull run,” echoed founder and chief executive of Property First, Bhavesh Kothari.
The report, which studied realty activity in the top seven cities during the first nine months of the calendar year, found Delhi NCR, Mumbai and Hyderabad leading the way, accounting for 90 per cent of total luxury housing sales during the period.
Overall, residential sales across price categories, during the period, exceeded 2,30,000 units, as developers matched the demand momentum with over 2,20,000 homes in new launches.
According to the consultancy, the housing market in India is anticipated to exceed the 1,50,000 milestone to break a three-year record this festive season. “The October-December 2023 quarter is poised to attract a substantial number of first-time buyers, with fence-sitting end-users expected to make decisions during the festive season offers and discounts,” said Anshuman Magazine, CBRE Chairman and Chief Executive for India, South-East Asia, Middle East and Africa.
The December quarter which follows festivals such as Ganesh Chaturthi, Dhanteras and Diwali, among others, has traditionally been a strong quarter for residential sales in the country. Home purchase is seen as an emotive concept in India, often desiring auspiciousness.
During the period under review, the mid-end housing bracket dominated the market with nearly a 50 per cent share in overall sales, followed by the luxury and affordable segments, respectively. Mumbai, Pune and Bengaluru cumulatively accounted for a 62 per cent share of the overall residential property sales during the nine month period.
Remarkably, the share of the affordable housing bracket, priced at Rs 50 lakh and below, was at a decadal low during the January-September period, property consultancy Knight Frank India said. Industry experts blamed its shrinking share on surging prices, increasing home loan rates and the lingering effects of the Covid-19 pandemic.
Other stakeholders blamed an aggregate decline in supply of affordable housing units, owing to increasing land and input costs.
“Besides, from a purely investment angle, luxury properties fetch much higher appreciation than affordable properties,” Kothari added.
What lies ahead?
Going forward, both sales and new launches could reach a ten-year high in 2023, touching or even exceeding the 300,000-unit mark, the report highlighted. Furthermore, the luxury segment would continue to witness healthy traction amid a spate of new launches, it added.