Realty Boom: Share of premium homes jumps 200% in 5 years, data shows

The country’s residential real estate market is witnessing a steady recovery since it touched the lows during the COVID-19 pandemic in 2020 and 2021. While the dream run continues for most leading developers in top markets, the growth in launch of new projects is primarily driven by demand for premium homes. Once a market driven by affordable units, especially between 2015 and 2018, India’s housing market has undergone a significant change since the pandemic disrupted lives.

Latest data from Anarock Research shows, premium homes are now a key segment in the housing market. In January-March (Q1) 2024 quarter, the share of premium homes (homes priced above Rs 1.5 crore) in overall launches in top seven markets across India stood at 25%. The figure is over 200% higher than its share during the same period five years ago. In Q1, 2019, the share of premium homes was at 7% of the over launches. In Q1 2024, out of the 110,860 units launched, 28,020 were in the premium category. In comparison, in the entire year of 2019, some 25,770 premium units were launched.

Developers’ inclination towards premium Homs is not without rationale. During the quarter, out of 130,170 units sold across the country, 27,070 units or 21% were from the premium category. While, the mid and high-segment homes (priced between Rs 50 lakh to 1.5 crore) comprised 59% of the homes sold.

“As luxury homes gain more traction in both new supply and sales, affordable housing continues its retreat to the sidelines. The luxury segment is driven by a mounting appetite for bigger homes by branded developers in superior locations," says Anuj Puri, chairman, Anarock Group.

Meanwhile, the stare of affordable homes (priced below Rs 50 lakh) continue to slide. Out of the 1,10,860 units launched in Q1 2024 across the top 7 cities, just 19,980 units or 18% were in the affordable segment. Five years ago, in Q1 2019, out of approx. 70,480 units launched across the top 7 cities, affordable housing comprised a whopping 44%.

“Affordable housing, on the other hand, is driven primarily by lower ticket sizes. The downward spiral of this erstwhile poster-child of the Indian housing industry 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.