Homes getting out of reach for middle class? Share of affordable housing at all-time low in Q1

Affordable homes in India are fast losing their sheen. Homes priced below Rs 50 lakh now comprise only 15% of the overall residential real estate market in India after taking a hit during the pandemic. 

The past two years have seen the share of affordable homes sliding from 27% in Q1, 2022 to 15% in Q1, 2024 -- the lowest market share for affordable homes in years, according to JLL.

Share of premium homes, priced above Rs 1.5 crore, however, is seeing a good run.
In Q1, 2022, premium homes made up for around 19% of the market across the top seven metros in India, this share rose to 23% in Q1, 2023. In Q1, 2024, the share of such homes in the overall sales further grew to 28%.

Luxury homes priced between Rs 3 crore and Rs 5 crore have seen a substantial jump - from 3% of the residential market in Q1, 2022, to 7% in Q1, 2024. Ultra-luxury homes that are priced over Rs 5 crore have also witnessed a significant jump in their sales. Its share, during the two-year period, has surged to 4% of the market from 2%.

“There have been notable shifts in the sales distribution across different segments of the residential market. In the luxury segment, which comprises apartments priced at Rs 3 crore and above, the share of quarterly sales has witnessed a significant increase, rising from 5% in Q1 2022 to 11% in Q1 2024. In contrast, the affordable segment, encompassing apartments priced below Rs 50 lakh, has experienced a decline in its share of sales,” says Siva Krishnan, Senior Managing Director - Chennai & Coimbatore, and Head - Residential Services, India, JLL. 

“These figures reflect a shifting trend in the real estate market, with buyers showing increased interest in the luxury segment. It underscores the need for developers to cater to evolving buyer preferences and adapt their offerings accordingly,” he added. 

The growth  of luxury homes is particularly pronounced in the Delhi-NCR region, where in Q1 2024, around 44% of sales were in the luxury segment, fuelled by a high number of launches and a strong buyer response.

According to Samantak Das, Chief Economist and Head of Research and REIS, India, JLL, Mumbai saw maximum sales in the Rs 1.5 crore to Rs 3 crore price segment. “The strategic launch of right products by the developers taking into cognisance  the demand and market dynamics has led to this new growth phase in the residential market. Interestingly some of the branded developers are also planning to enter newer markets and cities to expand their portfolio and market share,” he said.