Affordable Housing Market in India Sees a Decline in the January-March 2024 Quarter; PropTiger Report
India's affordable housing market experienced a significant shift in the January-March 2024 quarter, with the share of affordable homes priced up to Rs 45 lakh falling sharply. According to data from housing brokerage firm PropTiger.com, this segment's representation in total housing sales across the top eight cities plummeted from 48% in the same period last year to just 22%. This decline points to a burgeoning interest in luxury residential properties post-pandemic, overshadowing the demand for more economically priced homes.
During the reviewed quarter, housing sales saw an impressive overall increase, growing by 41% to 120,640 units across major cities including Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai Metropolitan Region (MMR), and Pune. However, the composition of these sales leaned heavily towards higher-priced segments. The data revealed that homes priced below Rs 25 lakh only constituted 5% of the total sales, a notable drop from 15% in the prior year.
The distribution of sales among other price brackets remained mixed. Properties ranging from Rs 25-45 lakh accounted for 17% of sales, down from 23% the previous year. The share for homes priced between Rs 45-75 lakh remained unchanged at 26%. However, there was an uptick in the Rs 75 lakh to Rs 1 crore range, which grew from 12% to 15%. Notably, the share of luxury properties priced at Rs 1 crore and above surged dramatically to 37%, up from 24% last year, indicating a clear shift in consumer preference towards high-end properties.
This trend towards luxury housing has been attributed to several factors, including robust economic growth, stable mortgage rates, and a growing preference for homeownership. The significant rise in the sales volume and value, which reached Rs 110,880 crore from Rs 66,155 crore in the previous year, underscores a strong market with considerable economic implications. According to Vikas Wadhawan, Group CFO of REA India and Business Head of PropTiger.com, this surge in housing sales bodes well for the overall economy, especially considering the real estate sector's extensive impact on related industries such as cement and steel.
Despite the downturn in affordable housing, the overall momentum within India's housing market remains positive, with expectations of continued growth and demand throughout 2024. This dynamic shift highlights a changing landscape in India’s real estate market, where luxury properties are increasingly becoming the focal point of new residential developments.
