In the first quarter of 2024, the residential property sector in India’s top seven cities witnessed robust growth in both sales and new launches. However, there is a noticeable imbalance across budget segments.

Luxury housing sales have surged, contrasting with the continued decline in affordable housing, according to the latest data from Anarock. Approximately 1,30,170 units were sold across the top seven cities in Q1 2024, with luxury homes priced at Rs 1.5 crore and above capturing a significant 21% share, totaling about 27,070 units. This marks a stark contrast from five years ago when luxury housing accounted for only four percent of the market.

On the other hand, affordable housing reached its peak in Q1 2019, holding a share of 37%, with approximately 78,525 units sold across the top seven cities. However, in Q1 2024, only 26,545 affordable housing units were sold, accounting for a mere 20% of overall sales in the top seven cities. In contrast, the mid-range and premium housing segment continued to dominate, with approximately 76,555 units sold, representing a 59% overall sales share.

Regional disparities are evident, with Delhi NCR witnessing a significant 39% of total units sold in the luxury segment in Q1 2024, totaling 6,060 units out of 15,645 units sold. In Kolkata during the same period, affordable housing saw the highest sales, with around 49% of total units sold. In cities like Bengaluru, Mumbai Metropolitan Region (MMR), Chennai, Pune, and Hyderabad, the mid-range and premium housing segments observed the highest sales in Q1 2024. These units were priced between Rs 40 lakh and Rs 1.5 crore.

Anuj Puri, chairman of Anarock Group, notes that luxury homes are gaining traction in both new supply and sales, while affordable housing is receding to the sidelines. He attributes this trend to a growing appetite for larger homes by branded developers in superior locations. Affordable housing, on the other hand, is primarily driven by lower ticket sizes.

It is noteworthy that five years ago, in Q1 2019, affordable housing comprised 44% of total units launched across seven cities, while the luxury segment accounted for just nine percent. However, in Q1 2024, out of a total of 1,10,860 units launched across the top seven cities, luxury homes constituted 25%, while affordable homes accounted for only 18%.

Affordable housing has witnessed a significant trend reversal in terms of new supply share over the last five years. In 2019, the new supply share of affordable homes stood at 40%, totaling at least 2.37 lakh units across the top seven cities. However, in Q1 2024, its supply share plummeted to a mere 18% of total new launches.

Overall, these trends highlight the changing dynamics of the Indian real estate market, with luxury homes gaining prominence and affordable housing facing challenges. Developers are aligning their supply with the prevailing demand, focusing more on luxury housing projects.