While luxury home sales are zooming, affordable housing sales is a different story, shows Anarock data

The Indian residential property market seems to be booming, both in terms of sales and new launches. Anecdotal data from developers show that luxury sales in particular have been robust, especially over the past year or so.

Developers such as DLF, Godrej Properties, Ashiana Housing have reported their luxury projects getting completely sold out in a few days, in some cases within just hours of launch. Just recently in April, Ashiana Housing reportedly sold 224 luxury flats worth ₹440 crore in Gurugram, in just 15 minutes.

But, the picture is not all rosy. While luxury housing sales are surging, affordable housing sales have declined. A new report by Anarock shows that the share of luxury sales (homes priced above ₹1.5 crore) was a whopping 21% in Q1 2024, compared to just 4%, five years ago. On the other hand, the share of affordable housing sales stood at 20% in the January to March quarter of 2024, a significant decline from the 37% share, five years ago.

“The luxury segment is driven by a mounting appetite for bigger homes by branded developers in superior locations," says Anuj Puri, Chairman, Anarock Group. The downward spiral of this erstwhile poster child of the Indian housing industry (affordable housing) began during the pandemic and then morphed into a broader malaise. Even as the nation awaits the results of the ongoing general elections, any affordable housing revival will hinge on further government sops and incentives for buyers and developers, he adds.

Affordable Vs. Luxury Housing

Over a five-year period, the report shows that the new supply and sales share of luxury homes has been steadily rising. Pre-covid, luxury homes accounted for about 11% of overall new supply in the top 7 cities. In Q1 of 2024, this share has gone up to as much as 25%. From 25,770 luxury home units launched in the whole of 2019, over 28,000 units were launched in just the first quarter of 2024.

Affordable housing supply, meanwhile, has shrunk dramatically in the past five years. In 2019, supply of affordable homes stood at 40% out of the overall new supply additions in the top 7 cities. In Q1 2024, this number has dropped to just 18% of total new launches.

The report also says that NCR saw a major trend reversal in this five-year period – from affordable segment having the lion’s share in Q1 2019 to it slipping to the lowest in Q1 2024.