DEMAND for luxury homes remains muted in India’s nine prime residential markets as more than half of such units launched in the past three years in these markets remain unsold, data available with PropTiger.com show.
Numbers available with the Elara Technologies-owned real estate portal, that also owns Housing.com and Makaan.com, shows that a total of 1,131 housing units, priced over Rs seven crore, were launched during the three year period between December 2016 and December 2019. Of these, 577 units or 51 per cent remained unsold as of January 2020. Similarly, a total of 3,656 units, priced between Rs 5 crore and Rs seven crore, were launched in these markets in the past three years. Nearly 55 per cent of this stock remains unsold. Additionally, a total of 8,503 units, priced between Rs three crore and Rs five crore, were launched in these markets during this period, of which 56 per cent stock remains unsold, data show.
|Price bracket||Unsold inventory in nine markets as of March 2020|
|Rs 1-3 cr||51,997 units|
|Rs 3-5 cr||4,762 units|
|Rs 5-7 cr||2,025 units|
|Above Rs 7 cr||577 units|
In terms of absolute numbers, the financial capital of India, Mumbai, has the highest number of unsold luxury units (30,015), followed by India’s pharmaceutical capital Hyderabad (8,554) and the Silicon Valley of India, Bengaluru (5,794) in third place.
When compared to the levels seen in 2017, unit launches in the luxury segment declined in most price brackets across the nine markets.
In the Rs one-three crore price bracket, for example, 29,775 units were launched in 2019 as against 29,996 units in 2018. In the Rs five-seven crore price bracket also, only 859 units were launched last year when compared to 1,536 homes in 2018. Similarly, in the over Rs seven crore price range, only 34 units were launched across India’s nine markets in 2019 as compared to 542 units in 2018. In the Rs three-five crore price bracket, however, launches increased, from 2,675 in 2018 to 3,092 last year.
“Real estate in India has been under immense pressure because of an on-going demand slowdown. This has impacted the residential real estate sector across the board, including the luxury housing segment. The demand for luxury homes fell post-demonetisation, and that trend has not changed much since. The on-going crisis involving the coronavirus pandemic is likely to further impact demand across the residential real estate sector in H1 FY21, including luxury housing,” says Dhruv Agarwala, Group CEO, Housing.com, Makaan.com, and PropTiger.com.
Agarwala, however, expects renewed interest from NRI customers in India’s luxury housing segment in the event they fall in the value of the Indian rupee continues.
“The Indian currency recently fell beyond Rs 77 against the US dollar. This puts NRI homebuyers in an advantageous position as they would find buying luxury homes a relatively more attractive investment option than before,” further added by Agarwala.
The cities covered in the analysis are Ahmedabad (Includes Gandhinagar), Bengaluru, Chennai, Gurugram (includes Bhiwadi, Dharuhera and Sohna), Hyderabad, Kolkata, Mumbai (includes Navi Mumbai and Thane), Pune and Noida (includes Greater Noida, Noida Extension and Yamuna Expressway).