A recent report from property consultant Anarock Group has unveiled a significant trend in India’s real estate landscape: the exponential growth of luxury home sales over the past five years.

Luxury homes, classified as properties priced above 15 million rupees ($179,650), have seen a remarkable surge, accounting for 21% of all residential units sold in the top seven Indian cities during the first quarter of 2024. This marks a substantial increase from the 7% share observed for the same period in 2019.

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This surge in luxury home sales aligns with India’s robust economic growth and heightened demand from non-resident Indians (NRIs). Notably, earlier this year, DLF Ltd.’s luxury project comprising over 1,100 homes near New Delhi sold out within three days prior to construction commencement, with NRIs acquiring a significant quarter of the units.

Conversely, the proportion of affordable housing units sold has witnessed a decline, dropping to 18% from 37% during the same period. Meanwhile, the mid-range and premium housing segment, encompassing homes priced between 4 million and 15 million rupees, has maintained its dominance, capturing nearly 59% of the market share.

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Anuj Puri, Chairman of Anarock, attributes the growth in the luxury segment to an increasing demand for larger homes offered by reputable developers in prime locations. However, he notes a stark contrast with the affordable housing sector, which has yet to regain its peak sales share from 2019.

The shift in market dynamics is further reflected in the composition of new housing supply. Luxury homes now constitute 25% of the new unit offerings, a significant jump from the 11% recorded in 2019. In contrast, the supply of affordable housing has dwindled to 18%, down from 40% during the same period.

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The report underscores the evolving preferences of Indian homebuyers, with an increasing inclination towards luxury properties. As this trend continues to shape the real estate market, developers and investors are poised to capitalize on the growing demand for upscale residences.