Luxury homes' share in total sales nears affordable for first time: Report

Demand for luxury units has consistently increased in the last five years

The share of luxury homes priced above Rs 1.5 crore comprised 21 per cent of total sales in the January-March quarter this year to almost equal affordable homes (20 per cent) – the first time it happened so, said a report on Friday.

Real estate consultancy Anarock said the share of luxury homes was 7 per cent in the same quarter in 2019. The share of affordable homes, priced Rs 40 lakh or below, decreased to 20 per cent from 37 per cent in the same period.

As many as 1,30,170 homes were sold in the top seven cities in the January-March quarter. Of these, 27,070 were luxury homes and 26,545 affordable homes.

As many as 76,555 units were sold in the mid-range and premium housing segment, priced between Rs 40 lakh and Rs 1.5 crore, during the period, comprising 59 per cent of overall sales.

The share of affordable housing has been declining since the pandemic due people increasingly preferring larger homes. In the July-September quarter last year, the sales of luxury homes overtook affordable homes for the first time in India.

"The downward spiral of this erstwhile poster child of the Indian housing industry began during the pandemic and then morphed into a broader malaise," said Anuj Puri, chairman of the Anarock Group.

"Even as the nation awaits the results of the ongoing general elections, any affordable housing revival will hinge on further government sops and incentives for buyers and developers," he said.

The trend’s impact is also visible on the supply side. Of the 1,10,860 units launched in the January-March quarter in the top seven cities, 28,020 (or 25 per cent) were luxury homes and 19,980 units (18 per cent) were in the affordable segment.

In 2019, of the 70,480 units launched, affordable housing had a 44 per cent share and luxury was at 9 per cent.

Among top cities, the Mumbai Metropolitan Region (MMR) accounted for the highest sale of luxury homes at 9,360 units. MMR was followed by 6,060 units in the National Capital Region (NCR) and 5,755 units in Hyderabad.

The largest number of affordable housing units were sold in the MMR at 12,650. Pune was next at 4,600 units and NCR third at 4,305 units.