The luxury housing market is experiencing a remarkable surge in sales, with the first half of 2023 witnessing a 130% increase in transactions, according to data from property consulting firm CBRE South Asia. Key cities such as Hyderabad saw a remarkable 14-fold rise in sales, while the Delhi-National Capital Region (NCR) observed a three-fold increase. The data, encompassing the top seven cities of India – Mumbai, Delhi-NCR, Pune, Bengaluru, Kolkata, Hyderabad, and Chennai – shows a strong demand for upscale properties.
A total of 6,900 luxury units were sold between January and June, with Delhi-NCR, Mumbai, and Hyderabad contributing to a significant 90% of this figure. This boost in luxury sales comes as developers pivot their focus towards this segment due to escalating house prices and increased loan costs, which might have affected demand in the lower and mid-income segments.
The demand for premium and luxury homes has led to a substantial price surge, with prices jumping by approximately a quarter over the last five years, mainly concentrated in the past couple of years. Properties classified as premium are those priced above ₹4 crore.
Cyrus Mody, CEO of Viceroy Properties, attributed the earlier weak demand for luxury housing to discrepancies between developers’ expectations and buyer willingness to pay, as well as the importance of location for luxury sales. However, the landscape shifted during the COVID-19 pandemic, with a rise in affluent individuals from start-ups and stock markets channeling their profits into real estate. Additionally, non-resident Indians have shown increased interest in the Indian property market.
The demand surge also stems from the need for more spacious homes with enhanced amenities, fueling the popularity of luxury housing. Developers like Lodha and Prestige Estates have reported robust sales in their upscale projects. Anshuman Magazine, CEO of CBRE India, South-East Asia, Middle East & Africa, predicts continued momentum in the premium and luxury segments, unaffected by mortgage rate fluctuations.
With a consistent six to seven percent quarterly increase in average house prices, the luxury segment has seen a substantial uptick. The growth in demand for larger residences has driven developers to launch high-end projects, causing housing prices for under-construction units to rise in cities like Kolkata, Hyderabad, Delhi NCR, and Bengaluru.
Anuj Puri, Chairman of ANAROCK Group, highlighted the remarkable price appreciation luxury homes have experienced due to robust sales and a strong supply pipeline. Particularly, Hyderabad stands out as a standout performer in the luxury market, witnessing exceptional appetite among buyers and substantial price escalation. As the festive season approaches, experts anticipate the trend to continue.
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