After the pandemic, housing has become a significant aspiration for urban Indians. Mid-segment buyers have increasingly preferred projects offering superior amenities and better connectivity. This shift reflects a broader desire for improved living standards, with homebuyers focusing on larger spaces and flexible configurations that accommodate modern lifestyles. The demand for such features has led to a notable increase in the average flat size, which grew by 11.4% between 2020 and 2023, reaching 1,300 square feet. These trends underline the evolving priorities of homebuyers in post-pandemic India.
Residential real estate markets in India, which had seen robust growth since the pandemic, are now witnessing their first signs of a slowdown. Launches across top real estate markets fell by 2% during the first three quarters of 2024 compared to the same period in 2023. Sales also dipped by 3% year-on-year between April and September 2024. This slowdown aligns with concerns about waning urban demand across various sectors, including automobiles and consumer goods. Developers have responded by shifting focus from affordable housing to premium and luxury segments, reflecting a lack of viable opportunities in the lower price brackets.
Despite the overall market slowdown, the luxury housing segment has demonstrated remarkable resilience. Residential units priced above ₹2.5 crore have experienced a boom, with launches across major cities like Mumbai, Delhi-NCR, Bengaluru, and Chennai growing at a CAGR of 116% between 2020 and 2023. From 4,000 units in 2020, these launches soared to over 41,000 in 2023, and the trend continues in 2024, with a 56% growth in the first three quarters alone. This robust demand highlights the premiumisation of India’s residential real estate market.
In the Delhi-NCR region, the trend is especially pronounced. Sales of luxury homes dipped marginally by 0.6%, but the average ticket size surged by 56% year-on-year. Developers like DLF Ltd. have reported growing interest from Tier-2 cities, with families investing in super-luxury properties. Aakash Ohri, Joint MD of DLF, emphasized that luxury housing demand has transcended geographical boundaries, signaling a nationwide shift toward premium residential offerings.
This growing appetite for luxury homes is reshaping India’s real estate landscape. As developers continue to cater to this segment, the market is set to evolve further, offering diverse opportunities for homebuyers seeking exclusive and well-connected living spaces.
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