Discounts, favourable exchange rates are driving up luxury home sales

• The share of luxury homes in total housing sales has doubled across the top seven cities, according to a report.
  
• Anarock report says that it is the end-users who are driving these sales.
  
• In addition to builders offering discounts, NRIs are also taking advantage of the favourable exchange rates to snap up high-priced properties.
  
• The share of affordable housing in the total housing sales, however, has dwindled in the period under review.

Indian luxury home sales have shown a steep rise across the country’s top seven cities in the first half of 2022.

According to a report by Anarock Research, 25,700 luxury housing units were sold in the first half of the year – comprising 14% of total home sales. This share is twice the level witnessed in the first half of the pre-pandemic year of 2019, when it was only 7% of the total home sales, with 17,740 units sold.

Luxury homes are defined as those properties that cost ₹1.5 crore or above.

These sales were led by Mumbai Metropolitan Region (MMR) and the National Capital Region (NCR), with high real estate prices. MMR’s luxury housing sales share increased to 25% of the total sales from 13% in 2019, while NCR saw a steep jump in its share of total sales at 12% in the period under review, up from 4% in 2019.

All the other cities – be it Bangalore, Hyderabad, Pune, Kolkata or Chennai – also saw the share of these high priced units going up. The Anarock report noted that end-users were driving sales instead of investors.

"There is a clear takeaway on overall economic performance. Even though the typical buyers in this budget segment were not as impacted by the pandemic as the rest, HNIs (high networth individuals) are conscious of cost. Discounts by developers made luxury properties very attractive for these buyers and NRIs have also been snapping up luxury homes in India because of the favourable exchange rate,” said Anuj Puri, chairman of Anarock group.

The report also said that developers have stepped up new supply in the luxury segment, launching over 28,000 such units across the cities in the first half of 2022. Approximately, 28,960 luxury homes were launched in the entire 2019.

At the same time, the share of the affordable housing segment – or houses priced over ₹40 lakh – saw its sales share dip to 31% from 38% in 2019. “Hyderabad saw the maximum dip in affordable housing sales share followed by Chennai,” the report said.


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