Luxury residential segment sales increased by ~151 per cent on-year in Jan-March 2023 quarter after posting a strong performance in 2022. The segment witnessed continued momentum in sales and launch activity, said a CBRE report. “Post-pandemic uptick in ownership of luxury housing results from homebuyers’ mindset looking for larger spaces and a higher preference for home ownership with better amenities”, said the report.
Overall, residential units across all segments posted 12 per cent QoQ as well as YoY growth in overall sales during the fourth quarter of FY23. During Jan-March 2023, a total of over 78,000 housing units were sold and about over 81,000 units were launched. Out of this, the CBRE report maintained, 49 per cent share was recorded in the mid-end category in units sold, followed by affordable/ budget projects. Earlier, another survey had highlighted that more than half of Gen Z respondents planned to move to a new home in the next two years, compared to only 29 per cent of baby boomers.
In terms of regions, luxury housing sales in Delhi-NCR surged by over 216 per cent, Mumbai by 44 per cent, Hyderabad by ~800 per cent, Kolkata by 100 per cent and Pune by nearly 13 times on a YoY basis for the quarter ending March 2023. Mumbai led in the number of total housing units sold at 19,000 units, followed by Pune (18,000 units), Delhi-NCR (11,600 units) and Bangalore (11,500 units). On the new launches front, Mumbai (25,300 units), Pune (16,000 units) and Delhi-NCR (11,200 units) cumulatively accounted for about 64 per cent share during Q1 2023, CBRE said.
“The momentum is expected to continue in the coming quarters as well. Projects with better amenities, focus on health and safety and clean surroundings to further gain an edge amidst evolving consumer preferences,” said Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE.
Outlook for the rest of the year
While the report suggested strong sales and launch momentum in the first half of 2023, a minor tapering in activity is expected in the middle of the year but its impact could be cushioned by the festive season. Furthermore, capital value appreciation is expected to vary basis the segment, city, unsold inventory levels and even project attributes. However, the report said that the developers are likely to be cautious about raising prices.
Projects in the higher ticket size, that is, Rs 1.5 crore and above, will continue to see traction in sales with more new launches in the bracket. Also, the impact of the rising home mortgage rates would be limited on this segment. Also, a higher number of joint ventures and joint development initiatives are expected as large developers are foraying into tier-II cities in partnership with local players in order to manage regulatory hurdles and understand consumer preferences.