Luxury Homes in Trend – Decreased Demand for Affordable Housing
The evolving dynamics of India's real estate market show a rise in demand for luxury homes alongside a decline in affordable housing options.
Owning a home is increasingly challenging for India's middle class, with affordable housing options becoming scarce and the budget homes trend declining. Homes priced below Rs 50 lakh now only represent 15% of the country's housing market, a significant decline from 27% in 2022. Conversely, the demand for premium homes, valued above Rs 1.5 crore, is on the rise. In India's top seven metropolitan areas, the share of the luxury real estate market has surged from 19% in 2022 to 28% in 2024.
The trend towards luxury living is evident in the increased demand for high-end residences. Homes priced between Rs 3 crore and Rs 5 crore have seen their market share grow from 3% to 7% between 2022 and 2024. Similarly, ultra-luxury properties, priced at over Rs 5 crore, have experienced a sales share increase from 2% to 4% during the same period.
Siva Krishnan, Senior Managing Director at JLL, notes this shift in market dynamics, highlighting a decline in affordable housing demand alongside a surge in luxury real estate. He emphasises the need for developers to align their offerings with evolving buyer preferences to meet market demand effectively.
The luxury lifestyle trends are particularly seen in the Delhi-NCR region, where luxury homes accounted for approximately 44% of sales in the first quarter of 2024. This surge in luxury property purchases is attributed to an increase in new launches and robust buyer interest.
Samantak Das, Head of Research and Chief Economist at JLL, underscores Mumbai's dominance in the price segment ranging from Rs 1.5 crore to Rs 3 crore. He credits developers for strategically launching products tailored to market dynamics and consumer demand.
The evolving dynamics of India's real estate market show a rise in demand for luxury homes alongside a decline in affordable housing options. Developers are adapting to these changing homebuyer preferences by focusing on luxury offerings and expanding into new markets to capitalise on emerging opportunities.
