Luxury Housing Supply Triples In 2 Yrs Since Demonetization: Report

Among other things, luxury residential housing market was hit hard by demonetization. While the cash from the market was nullified overnight, the government shifted its focus of affordable housing, leaving luxury housing in a limbo.

No wonder that developers restricted new supply in the luxury category across the top 7 cities in 2018. However, a recent report by Anarock points out that while the affordable and mid-segment housing sectors continued to dominate the overall supply in H1 2019, luxury and ultra-luxury housing also saw a resurgence.

This is for the first time after demonetization that the supply in luxury housing in on upswing. As many as 16,100 new units have been launched in the luxury segment (priced >INR 1.5 Cr) across the top 7 cities as comparted to just 5,240 units in H1 2017, as per Realty Myth.

Effectively, new luxury housing supply has more than tripled since H1 2017 (the period immediately after demonetization). In fact, H1 2018 saw new luxury category supply increase by 40% since H1 2017 to stand at 7,350 units across the top 7 cities.

Predictably, it is MMR and NCR that are leading in the new luxury supply in H1 2019, accounting for a 59% overall share.  The twin metros are followed by Bangalore and Hyderabad with the launch of 2,210 and 2,070 units respectively.

Maximum launches in luxury segment happened in the budget range of INR 1.5 Cr – 2.5 Cr. This bracket saw the maximum launches with 9,940 units while remaining 6,610 units were launched in the higher price bracket of >INR 2.5 Cr upwards.

The ultra-luxury (price bracket of >INR 2.5 Cr) saw the maximum launch in MMR with 2500 units. Here is the further break-up:

•  MMR – 2,500 ultra-luxury units in H1 2019 (1150 units in H1 2017)
• Hyderabad – 1,170 ultra-luxury units (f180 units in H1 2017)
• NCR – 870 ultra-luxury units (85 units in H1 2017)
•  Bangalore- 800 ultra-luxury units (275 units in H1 2017)
• Pune – 570 ultra-luxury units (0 units in H1 2017).

 Another shift seen in the luxury segment is the customer base. During the previous years, primarily investors drove demand in luxury housing. However, this segment is almost completely end-user driven today with HNIs from India and NRIs cashing in on the prolonged slowdown and the more or less stagnant prices along with best-buy deals in their preferred cities.

Here is more on luxury housing.