Developers focus on luxury housing as affordable housing projects remain stagnant | Business News

The residential real estate sector in India is witnessing a significant shift towards big-ticket housing, with launches of high-end units priced above Rs 1.5 crore skyrocketing by 1,000 per cent between 2019 and 2023. This surge in premium housing launches comes at a time when inventory levels are at their lowest in a decade, and average prices have spiked by 26 per cent over the last five years.

While sales in the affordable housing segment have grown by 27 per cent, the number of new launches in this category has remained stagnant in the country’s top seven cities. This imbalance has raised concerns about affordability moving forward, especially for first-time buyers.

According to experts, the demand for luxury housing is expected to rise further in the next decade, driven by an increase in the share of High Net Worth Individuals (HNIs) and Ultra High Net Worth Individuals (UHNIs) households in India. The trend towards larger units has also been fueled by the shift towards remote work following the Covid-19 pandemic, with the average flat size increasing by 11.4 per cent over the last five years.

Developers are gravitating towards the premium end of the market due to soaring demand and better margins, leading to a surge in big-ticket launches. However, the stagnation in affordable housing options raises concerns about the overall affordability of the housing market.

With drastic changes in the real estate landscape, the share of medium-ticket launches has also increased slightly, indicating a shift towards units priced between Rs 75 lakh to Rs 1.5 crore. The dynamics of the housing market are evolving rapidly, with affordability levels, demand trends, and inventory levels all playing a crucial role in shaping the future of India’s residential real estate sector.