Luxury segment housing sales in top 7 cities up by 97% in Jan-Sep’23: Report

The luxury housing segment in top seven Indian cities, comprising units priced at Rs 4 crore and above, maintained strong sales momentum, registering a 97% YoY increase in the Jan-Sep’23 period, according to CBRE’s report ‘India Market Monitor Q3 2023’. Total sales of luxury units during the first nine months of 2023 stood at approximately 9,200 compared to 4,700 units during the same period last year.

Among the leading cities, Delhi-NCR, Mumbai and Hyderabad emerged as the top three markets dominating sales, cumulatively accounting for nearly 90% of the total luxury housing sales across the top seven cities. Delhi-NCR led the charge with a share of about 37%, marking YoY growth of 126%. This was followed by Mumbai, Hyderabad and Pune, accounting for approximately 35%, 18% and 4%, respectively.

Source: CBRE South Asia

A similar trend prevailed during Q3 2023 in the luxury housing segment across the top seven cities, registering a 19% YoY increase in sales. The quarter witnessed total sales of approximately 2,400 units, compared to about 2,000 units during the same quarter in 2022. Among the cities, Mumbai, Hyderabad and Delhi-NCR emerged as the top markets leading sales during the quarter.

Building on the robust sales performance witnessed throughout the first nine months of 2023, the housing market is primed for further growth with the ongoing festive season. It is anticipated that 2023 festive housing sales are set to break a 3-year record, exceeding the 1,50,000-unit mark. Overall residential sales across price categories exceeded 2,30,000 units during Jan-Sep’23, registering a YoY growth of about 5%. Sustained momentum in demand led developers to launch over 2,20,000 new housing units during the same period. 

During Jan-Sep’23, residential sales were dominated by mid-end projects, accounting for almost half of the total sales, followed by high-end and affordable projects. Mumbai, Pune and Bangalore cumulatively accounted for a 62% share in sales during the Jan-Sep’23 period. On the other hand, Mumbai, Pune and Hyderabad dominated the new launches during the first nine months of the year, capturing a significant cumulative share of about 64%.

Notably, over 80,000 residential units were sold during the Q3 2023, while new unit launches stood at 72,000 during the same period. Mumbai, Hyderabad and Pune dominated the market for apartment launches, having a cumulative share of 63%. Further, Pune, Mumbai, and Bangalore accounted for the maximum sales of residential units in the quarter gone by, accounting for a cumulative share of about 62%. High-end and premium categories remained key sales drivers with a cumulative share of 35%, while the mid-end category’s share stood at 46% during Q3 2023.

Anshuman Magazine, chairman and CEO- India, South-East Asia, Middle East and Africa, CBRE, said, ” We anticipate the overall housing market to be further bolstered by the ongoing festive season in the coming months of 2023. With the pause in the interest rate cycle, incentives and schemes offered by developers in the festive season are likely to boost sales further. Q4 2023 is poised to attract a substantial number of first-time buyers, with fence-sitting end-users expected to make decisions during the festive season offers and discounts. As the residential cycle matures amidst inflationary pressures, we have witnessed increasing demand in the mid-end and premium categories. Conversely, the premium and luxury segment is expected to emerge as a sought-after investment avenue, particularly for HNIs and NRIs seeking to safeguard their investments amid global macroeconomic uncertainties.”

Future outlook for residential real estate

• Both sales and new launches could reach a ten-year high in 2023, touching or even exceeding the 3,00,000-unit mark.
• Coming months will see first-time buyers investing in residential property, taking advantage of the festive season offers and discounts.
• Projects in the premium/luxury segment would continue to witness healthy traction amidst a spate of new launches; mortgage rates to have a relatively muted impact on demand from this segment.
• The capital value growth is expected to see divergent trends among specific regions and property categories and is likely to be governed by unsold inventory levels and inventory overhang.
• Affordability is no longer the sole decisive factor for homebuyers as health and safety, sustainability and integration of smart home technologies have also started to emerge as being core to home purchase decisions