Over the last five years, the Covid-19 pandemic and the geopolitical tensions have rattled many - impacting household earnings and their monthly budgets. Steep rise in cost of living, subdued job market trends and, of late, a volatile equity market have added further strain on the country’s middle class that have cut down on purchases. While the consumer goods markets in the country have been feeling the pinch for sometime now, the residential homes market have started experience the pressure from subdued demand for mid-income homes.
Despite challenges though, one segment that continues to grow by leaps and bounds is the luxury homes - residential units priced over Rs 3 crore. Since the pandemic, there has been a significant increase in the demand for luxury and ultra-luxury properties. And after touching new highs in 2023, sales of luxury units have scaled new peak in 2024, latest data shows.
As per data from real estate services and investment firm CBRE, India’s luxury housing segment (units priced at Rs 4 crore and above) recorded a 53 per cent year-on-year sales growth in 2024 across top seven cities. While in 2023, some 12,900 luxury homes were sold in the country, in 2024 the number jumped to 19,700 units - with the national capital region of Delhi (Delhi-NCR) leading the pack. Out of the total luxury units sold during the year, nearly 53 per cent or 10,500 units were in Delhi-NCR. The figure was 90 per cent higher than the 5,525 luxury homes sold in the capital.
According to Aakash Ohri, Joint Managing Director and Chief Business Officer at real estate major DLF, the surge in demand for homes underscores a fundamental shift in people's perception of homeownership, where the value of having a place to call home has become more apparent.
“The luxury housing market in NCR has seen an impressive transformation, with luxury segment sales soaring to 45 per cent in the first half of 2024, up from just 3 per cent in 2019. While Gurugram in NCR has always been the top choice, we have also witnessed demand for luxury high-rises in New Delhi. DLF ONE Midtown, our latest luxury high-rise addition in New Delhi launched in 2022, is already trading at an impressive Rs 24,675 per square-foot. This continued growth and appreciation reflects the strong demand and trust in our developments as we continue to create spaces where residents can truly thrive and call home,” says Ohri.
“The luxury housing market in India continued to see robust growth in 2024, building on the strong performance of 2023. In Mumbai, demand for premium properties, particularly those priced above Rs 4 crore, surged significantly, reflecting a shift towards high-end living,” Amit Jain, Chairman & MD, Arkade Developers.
It is not just the luxury homes that are in high demand. Data from Anarock Research suggest, ultra-luxury homes - priced over Rs 40 crore - are selling like hot cakes as well. In 2024, some 59 units-luxury homes changed hands with a combined sales value of Rs 4,754 crore - 17 per cent higher than the combined sales value of Rs 4,063 crore for the 58 units that were sold in 2023. Out of these, at least 17 deals in 2024 were worth over Rs 100 crore each - 16 in Mumbai and 1 in Delhi-NCR (Gurugram). Overall, Mumbai dominated with 52 ultra-luxury residential deals in 2024, comprising an 88 per cent share of total deals followed by Delhi-NCR with 3 deals for two ultra-luxury homes in Gurugram and one in Delhi.
According to Anuj Puri, Chairman, Anarock Group, the yearly increase in both the number of deals and their overall sales value underscores the enduring demand for ultra-luxury properties across the top cities. “HNIs and ultra-HNIs are purchasing these trophy residences for personal use, investment, or both. This is a noteworthy market dynamic, given that home prices are surging nationwide due to increased input costs and robust buyer demand. Although there was only a one-unit increase in the number of transactions closed in 2024 compared to 2023, there was a 17% annual increase in value during the same period. Some of the most prominent Grade A developers have been upping ultra-luxury inventory in response to the growing demand,” he says.
With demand for luxury homes surging, developers are expecting a robust year ahead. In anticipation of further jump in sales, they have lined up new projects in the segment. Data shows, while in 2023 some 15,900 luxury units were launched, in 2024 developers have launched 24,180 units. According to Jain from Arkade Developers, housing demand is expected to remain strong in 2025, with steady price growth providing stability to the residential market. “Luxury and ultra-luxury segments are likely to outpace affordable and mid-income housing in growth”.
Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, expects the momentum to continue, with both sales and new housing unit launches to remain steady in the coming quarters. “Furthermore, cities traditionally associated with mid-end developments, such as Noida, Bengaluru, Pune, and Chennai, are increasingly witnessing a shift towards high-end projects, marking an exciting evolution in the residential market. However, with high capital values and ongoing global economic uncertainty, homebuyers may adopt a cautious approach in their purchasing decisions and perform all standard property due diligence,” he says.