Post-pandemic skyline favours the rich

Steep rise for luxury housing segment owing to NRI engagement, reinvestment of stock market gains

FPJ BureauUpdated: Tuesday, August 23, 2022, 09:21 AM IST
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The overall sales for the latter have risen steeply across the top seven cities – Delhi, Mumbai, Bengaluru, Pune, Hyderabad, Chennai and Kolkata. |

The pandemic-hit India that saw the paradox of a grossly unequal economic distribution, where the poor was seriously affected by lockdowns, layoffs and small industry closures, has truly reflected in the home-buying market this year.

While affordable housing recorded a dip during the first half of the year, luxury housing performed remarkably well. The overall sales for the latter have risen steeply across the top seven cities – Delhi, Mumbai, Bengaluru, Pune, Hyderabad, Chennai and Kolkata.

The latest research data compiled by property market researcher and consultant Anarock finds that of nearly 1.84 lakh units sold in these cities from January to June, 14 per cent (nearly 25,700 units) were luxury homes. Contrastingly, of 2.61 lakh units sold in the entire 2019 (prior to the pandemic), just seven per cent (17,740 units) were in the luxury category.

With a rise in share of this segment, Anarock data showed that the share of affordable housing (units priced below Rs 40 lakh) dipped to 31 per cent from January to June this year from 38 per cent in the entire 2019. Post-pandemic, affordable housing was significantly impacted as buyers in this category took the biggest economic hit.

The Anarock report showed that the Mumbai Metropolitan Region (MMR) and the National Capital Region (NCR) have led luxury home sales with H1 (first half) 2022 witnessing nearly 17,830 units sold in these two cities alone. In 2019, they accounted for a mere 11,890 luxury homes sold in the entire year.

In terms of overall sales, the MMR’s luxury housing sales increased from 13 per cent in 2019 to 25 per cent in H1 2022. In NCR, the sales share rose to 12 per cent in H1 2022, from four per cent in 2019.

“These figures are even more remarkable if we consider that it is mainly end-users who are driving luxury housing sales across these cities today, and there is a clear takeaway on overall economic performance,” says Anuj Puri, Chairman, Anarock.

“Even though typical buyers in this budget segment were not as impacted by the pandemic as the rest, high net-worth individuals (HNIs) are conscious of cost. Discounts by developers made luxury properties very attractive for these buyers and NRIs have also been snapping up luxury homes in India because of the favourable exchange rate,” he said.

Puri said one of the reasons for the sharp rise is the completion of many luxury projects this year. He added that the demand for ready-to-move units was higher as customers wanted to shift immediately. He said, “Further, the HNIs have made money during the pandemic from the stock market, which they are investing in real estate now.” The other reason is that joint families have felt the need to live together.

Mukesh Singh, director of sales at the leading Kalpataru Ltd, said, “With the onset of the pandemic, buyers are looking for homes that provide luxury amenities. Consumers are looking to buy bigger and luxurious homes from renowned developers who have a robust track record of executing projects on time.”

Puri said that sales in 2022 are likely to surpass the pre-pandemic level as the unsold stock has fallen to around six lakh units from a peak of nearly nine lakh units across seven cities on better demand and controlled supply.

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