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India’s premium housing market getting stronger!

Not many would have predicted that India’s residential real estate would emerge out of the lows of the pandemic in such a short period. But the resilient industry has instead marked record sales and new launches in 2021 and 2022 to beat the odds. Our country’s housing market is defying the downdraft that has impacted home sales and prices in the west and most of the developed world.

Despite rising interest rates and a noteworthy increase in average property values, residential sales in India’s top residential markets have shown remarkable growth and an upward trajectory. This noticeable improvement in key performance metrics stands as testimony that the year gone by has been a remarkable year for residential real estate. And a lot of this growth can be attributed to the luxury segment.

Luxury housing leads the growth

But even industry experts agree that not most of them expected that it would be the luxury housing segment that would help the sector spring out of a stubborn slowdown that had been taking a firm grip on it for years. 

NRIs and other affluent Indians, who worked outside during most of the pandemic and saved back on their spending, are now returning to the country’s housing market and pumping money in force. They are driving up the volume of new home sales and prices, which had stagnated in the years leading up to the pandemic.

According to market rating agencies, residential sales in the first half of the current financial year have shown a 49% increase YoY. This is the highest number of sales in the past ten years, according to available market data. Research and studies point out that the share of premium and luxury units in overall housing sales has consistently increased post-pandemic. Due to this rise, the marginal increase in price factor has not derailed the growth of India’s residential real estate segment.

The sales of new residential units in India’s major cities in FY 2022-23 are on track to be the highest in at least the last eight years, according to market studies.

The 11 large listed developers in the country are most likely to sell homes worth around $8 billion in the year that ends this March 31st. This number is estimated to be up 25% from the previous year.

Unlike the previous years, most developers launching new luxury housing projects witnessed a successful sale of all the units in their under-construction projects at the pre-launch stage because of the huge demand. This is also why the unsold stock in top cities has declined considerably.

Reasons for increasing demand

The demand for new homes in India, which are spacious and luxurious, has come from NRIs planning the move back home, IT executives working in start-ups, outsourcing and other tech firms, employees and financial services consultants, and other businesses which flourished during the pandemic while working from home. The pandemic and consequent demand for space also convinced many to shift from renters to owners or upgrade their home sizes.

The residential demand for homes in 2023 will also be supported by the aspiration for home ownership/upgrade and comparatively better affordability. The demand in the luxury segment goes beyond these considerations, and therefore any future hikes in interest rates will not have any significant impact on luxury housing.

The demographic trends also bode well for the residential industry. With 40% of India’s population predicted to be living in cities by 2030, the demand for homes is expected to only move upwards in the coming years. Real estate experts are extremely optimistic about the future of the housing sector in the years to come.

Born out of the excellence of Sukhwani Constructions, at RGS Realty, we live up to our motto of Build. Good. Our landmarks of goodness and purity set new benchmarks for the standard of living with their amenities and world-class construction quality. To know more about us and our projects, visit https://www.rgsrealty.com/

Sources:

  1. https://www.livemint.com/politics/news/indias-upscale-housing-market-strengthens-defying-global-trend-11672228803355.html 
  2. https://www.financialexpress.com/money/luxury-driving-indias-real-estate-to-new-highs-better-days-ahead-in-2023/2950986/
  3. https://www.businessinsider.in/business/news/mid-range-premium-housing-demand-drive-indias-residential-market-sales-in-2022-to-exceed-2014-peak/articleshow/96171545.cms