Residential Real Estate Trends in India
This is according to data collected from NCR, MMR, Bengaluru, Pune, Hyderabad, Chennai and Kolkata.
Indian luxury homes have done remarkably well as Covid-19 infections have receded, with overall sales up in the top seven cities, according to Anarock.
Of around 1.84 lakh units sold in the top seven cities in the first half of 2022, 14% were luxury homes – around 25,700 units, compared to just 7% in the whole of 2019.
Out of 1.84 lakh homes sold in the first half of 2022, about 57,040 units were in this budget category, showing a decline to 31% in the first half of 2022 from 38% in 2019.
Murtuza Arsiwalla, director of Kotak Securities, said the luxury segment grew faster than average affordable housing growth. Although there is no breakdown available by income, the gap between high and low income groups continues to grow, with the high income segment increasingly deploying its money in real estate to high price, he said.
Anuj Puri, Chairman of Anarock, also said there was a clear conclusion on the overall economic performance. Post-pandemic affordable housing has been significantly impacted as its target audience has taken the biggest economic hit.
Before Covid, the luxury residential market was never at its peak between 2012 and 2020, said Ram Raheja, managing director of S Raheja Realty. “Post-Covid is when they really saw a recovery. Demand is back in full force. People want more space, bigger houses and everyone is looking for improvements in their lifestyle especially in cities like Mumbai where space was a constraint and land is limited.
In cities like Mumbai, premium cuts by the local municipal corporation have also helped spur the development of micro-markets, Raheja said.
According to Niranjan Hiranandani, vice president of the National Council for Real Estate Development, an increase in wealth, affordability, as well as increased funding from banks, have helped spur growth.
“With work from home, those who lived in 1 BHK wanted to move to 2 BHK and those in 2 BHK wanted to move to 3 BHK and so on,” he said. The cost of land continues to be a higher cost in luxury housing and therefore demand remains relatively unaffected by the higher cost of raw materials compared to affordable housing where builders are unlikely to be able to to pass on all of the increased costs, he said.
But affordable housing, Arsiwalla said, continues to hold greater potential. The potential demand for affordable housing continues to far exceed what can be provided, Hiranandani also said.