The first half of 2023 has witnessed growth in the mid and premium housing segments. Residential units priced above ₹1 crore accounted for nearly 30% market share of sales vs. 25% in H1 2022. H1-23 also witnessed the second-highest half-yearly residential sales volume in 9.5 years, according to a report released by Knight Frank India.
Though the residential sector has recorded a sale of 156,640 units in H1 2023, marginally lower by 1% YoY (January – June 2023), the number was higher at 1.7% when compared to H2 2022. H1 saw growth in the premium residential segment, as it witnessed a rise across cities in H1 2023. The demand for mid-segment homes also eclipsed the affordable segment in H1. Mumbai, the largest real estate market in India, too witnessed a surge in demand for mid and premium segment housing. In the first half of 2023, a remarkable 40,798 units were sold, a testament to the city’s unwavering appeal to homebuyers.
Ram Raheja, Managing Director, S Raheja Realty, says, “Consumers’ capacity to make purchases in the premium market is growing. We anticipate that this will likely continue over the next one to two years. Many important markets have experienced fantastic sales, moving the majority of their inventory in just a few days. In particular, this is seen in the premium sector categories of homes valued at more than ₹5 crore. Therefore, we predict that consumer interest in the premium market will remain high.”
The market’s vibrancy is further boosted by the continuous influx of new projects. Vinay Rohira, Sales Head, SD Corp, adds, “Homebuyers now have a higher disposable income where they are willing to spend more leading to an increased demand for mid- and premium segment housing. Having a variety of housing options at their disposal has given homebuyers the freedom to select properties that suit their way of life.”
The key factors driving this unprecedented growth include the expected rise in income levels and a strong desire for homeownership, making residential sales flourish. Professionals and affluent individuals are increasingly seeking high-quality housing in well-connected and sought-after locations, drawn by the country’s growing economic status as a hub for job opportunities and economic growth.
An attractive aspect of the market lies in the returns on investment of this segment, which attracts both domestic and international investors looking to capitalise on the segment’s robust property price appreciation.
Steady growth
Among the top eight cities, NCR recorded a massive growth in sales that stood at a 10-year high. The volume of new residential launches grew 8% YoY to 0.17 mn units in H1 2023. The residential segment registered sales of 0.16 mn units in H1 2023. Hyderabad residential prices grew by 10% YoY, the highest among all markets.
A recent real estate research report by real estate consultant JLL India validated the sales of apartments over ₹1 crore increased by 50% between January and June 2023 across seven major cities, from 33,477 units to 50,132 units, due to increased demand for luxury homes.
The writer is CMD, Arkade Group.
