In a groundbreaking shift in the Indian real estate industry, the demand for luxury homes has outpaced that of affordable housing for the first time in India. This momentous development emerged during the July-September quarter, as revealed in a recent report by real estate consultancy Knight Frank.

During this quarter, 82,612 housing units were sold in India, marking a six-year high and a 12 percent increase over the 73,691 units sold in the corresponding quarter of the previous year. Notably, the high-end housing market, with prices exceeding Rs 1 crore, outstripped the demand in the affordable segment, priced below Rs 50 lakh.

Within the high-end category, homes priced between Rs 50 lakh and Rs 1 crore took the lead, accounting for 36 percent of the market share with 29,827 units sold. Sales in this segment surged by an impressive 14 percent year-on-year, with significant contributions from cities like Bengaluru, Pune, and Mumbai.

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Close behind was the luxury market, boasting a 35 percent market share. This segment experienced a remarkable 39 percent quarter-on-quarter increase in sales, soaring to 28,642 units, up from 20,501 units the previous year. The National Capital Region (NCR) recorded the highest sales followed by Mumbai, and Bengaluru in this category.

In stark contrast, the affordable housing segment, homes priced below Rs 50 lakh, witnessed a decline in market share, dropping to 29 percent from 36 percent the previous year. Only 9,930 units were sold in this category during the quarter, compared to 10,198 units in the same quarter last year. Significantly, the current market share of affordable homes stands far below the 54 percent recorded in 2018.

In conclusion, this shift underscores a momentous change in market dynamics, signaling a pronounced preference for higher-value properties while the affordable segment faces challenges due to rising costs. Despite elevated interest rates and escalating prices, high-end homebuyers seem undeterred, while the affordable housing market requires further interventions to stimulate demand and enhance development viability.

Commenting on the same, Navdeep Sardana, Founder, Whiteland Corporation, said, “The demand for luxury housing is on the rise due to the desire for a wholesome lifestyle, combining comfort and luxury amenities. These homes symbolize personal achievement, refinement, and progress in society. The luxury housing sector is expected to sustain strong sales momentum due to rapid urbanization, improved accessibility, and aspirational needs. The demand for luxury housing has almost doubled in the last five years, primarily due to the fiscal strength & proven delivery track record of reputable real estate players. NCR, particularly Gurugram, has seen a rise in luxury home sales, particularly among HNIs and UNHIs and affluent millennials who prefer to stay close to work and enjoy a convenient lifestyle. The sector is expected to sustain strong sales momentum in this festive quarter.”

“Real estate is experiencing a notable upswing, becoming the prime choice for investors, as per Anarock’s Consumer Sentiment Survey for H1 2023. High-end luxury housing sales have seen a significant surge during this period. Factors like the effective implementation of RERA have propelled remarkable growth in the Indian real estate sector. RERA’s core principles of transparency, accountability, and punctual project completion instill trust and assurance among buyers. This legislation ensures that developers meet the promised timelines and fulfill their commitments,” said Venket Rao, Founder, Intygrat.