New Luxury Housing Supply Triples in 2 Years Since DeMo

New Luxury Housing Supply Triples in 2 Years Since DeMo

Anuj Puri 08/08/2019 5
  • New supply of homes priced >INR 1.5 Cr stood at 16,100 units in H1 2019 against 5,240 units in H1 2017 (period immediately post DeMo)
  • In H1 2017, luxury supply in most cities fell to three-digit numbers; NCR & Pune saw minimal launches - merely 140 units collectively
  • Expensive markets MMR & NCR together comprise 59% share of new luxury stock in H1 2019 - 6,490 units & 3,030 units respectively
  • Over 9,940 units in H1 2019 added in price budget of INR 1.5 - 2.5 Cr, remaining 6,160 units added in >INR 2.5 Cr budget
  • Of the total 6.65 lakh unsold units in top 7 cities in Q2 2019, approx. 86,430 units are in the luxury category (priced >1.5 Cr)

Along with the resale homes market, luxury housing took the hardest hit after demonetization. The Government’s continued focus on affordable housing coupled with the surgical strike on high-value currency denominations in November 2016 took the sheen off luxury housing for two years in a row. As a result, developers restricted new supply in the luxury category across the top 7 cities.

However, ANAROCK's most recent research indicates that while the affordable and mid-segment housing sectors continued to dominate the overall supply in H1 2019, luxury and ultra-luxury housing also saw a resurgence.

As many as 16,100 new units have been launched in the luxury segment priced >INR 1.5 Cr across the top 7 cities – massively up from 5,240 units in H1 2017. Effectively, new luxury housing supply has more than tripled since H1 2017 (period immediately after demonetization). In fact, H1 2018 saw new luxury category supply increase by 40% since H1 2017 to stand at 7,350 units across top 7 cities.

Predictably, MMR and NCR dominated the new luxury supply in H1 2019, accounting for a 59% overall share, followed by major southern cities withBangalore and Hyderabad seeing the launch of 2,210 and 2,070 units respectively.

On further segregation of the available data, it emerges that the budget range of INR 1.5 Cr - 2.5 Cr saw the maximum launches with 9,940 units. The remaining 6,610 units were launched in the higher price bracket of >INR 2.5 Cr upwards. In this price category in H1 2019:

  • MMR saw the launch of 2,500 ultra-luxury units (from 1,150 units in H1 2017)
  • Hyderabad saw the launch of 1,170 ultra-luxury units (from just 180 units in H1 2017)
  • NCR saw the launch of 870 ultra-luxury units (from just 85 units in H1 2017)
  • Bangalore saw the launch of 800 ultra-luxury units (from 275 units in H1 2017)
  • Pune saw the launch of 570 ultra-luxury units (from zero units in H1 2017).

In sharp contrast to the trend seen in previous years when it was primarily investors who drove demand in luxury housing, this segment is almost completely end-user driven today. HNIs from India and NRIs cashed in on the prolonged slowdown and the more or less stagnant prices and best-buy deals in their preferred cities.

Unsold Luxury Housing Stock Declining

In terms of unsold luxury housing inventory, as many as 86,430 units are piled up across the top 7 cities as on Q2 2019 - an annual decline of 2%. Of this, MMR alone has a 56% share, followed by NCR with 17,800 units.

  • As of Q2 2019, nearly 46,200 luxury homes are unsold in the price bracket of INR 1.5 - 2.5 Cr, while the remaining 40,230 unsold units fall in the >INR 2.5 Cr budget.
  • In Q2 2018, unsold luxury housing stock priced INR 1.5 - 2.5 Cr stood at 48,160 units, and at 39,690 units in the >INR 2.5 Cr budget range.

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  • Tim Morison

    If only I could buy an expensive house in India

  • Peter Larson

    Maybe the prices are so expensive that even rich people cannot afford them.

  • Abbey Brown

    How about tackling poverty issues first. The Indian government should provide housing first to those below the poverty line.

  • Christopher Patrick

    Most of my Indian friends are complaining about demonetisation

  • Tom Green

    Pune is an attractive destination

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Anuj Puri

Real Estate Expert

Anuj Puri, Chairman of ANAROCK Group is a highly respected industry authority and thought leader with 30 years' experience in leveraging Indian and global real estate opportunities. His company ANAROCK has a staff complement of over 1800 qualified and experienced professional, with offices in all major markets in the country, dedicated services in Dubai and a global footprint with over 80,000 preferred channel partners.


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