While several new policy initiatives by the government resulted in a slowdown in the Indian luxury real estate market, but in the recent research, it indicates that while the affordable and mid-income housing continued to see a hike in the overall supply in H1 2019, luxury and ultra-luxury housing also saw a concurrent rise in both end-user and investor demand.
Big boost to Indian real estate! New Luxury Housing Stock Triples in 2 Years
Around 16,100 new supply of homes has been launched in the luxury segment in H1 2019 priced at Rs 1.5 crore across the major metro cities in India– jumped up by from 5,240 units in H1 2017. Now, new luxury housing stock has more than tripled since H1 2017 (the period immediately post demonetisation). During H1 2018, the new luxury homes supply saw a significant 40% rise from 7,350 units across the top 7 cities since the first half of 2017.
Expensive markets MMR and NCR dominated the new luxury stock in the first half of 2019, accounting for a 59% overall share, followed by major southern cities with Bangalore and Hyderabad seeing the launch of 2,210 and 2,070 units respectively.
Over 9,940 units in H1 2019 added in the budget range of INR 1.5 - 2.5 Cr, remaining 6,160 units were launched the budget range of INR 2.5 Cr budget. In this price category in the first half of 2019:
MMR saw the new supply of 2,500 ultra-luxury units (from 1,150 units in H1 2017)
Hyderabad saw the new supply of 1,170 ultra-luxury units (from just 180 units in H1 2017)
NCR saw the new supply of 870 ultra-luxury units (from just 85 units in H1 2017)
Bangalore saw the new supply of 800 ultra-luxury units (from 275 units in H1 2017)
Pune saw the new supply of 570 ultra-luxury units (from zero units in H1 2017).
Unsold stocks of luxury flats declining
In terms of unsold stock in the luxury housing category, as many as 86,430 units are piled up across the 7 major cities as on Q2 2019 - an annual decline of 2%. Of this, Mumbai Metropolitan Region accounted for the 56% share of unsold luxury housing stock, followed by NCR with 17,800 units.
As of Q2 2019, nearly 46,200 luxury homes are unsold in the price bracket of Rs1.5 - 2.5cr, while the remaining 40,230 unsold units fall in the price bracket of Rs2.5cr budget. In Q2 2018, unsold luxury housing stock priced Rs1.5 - 2.5cr stood at 48,160 units, and at 39,690 units in the >Rs2.5cr budget range.