Cost of luxury homes jumped 24% in 7 major cities in 5 years: Report

In the post pandemic period luxury homes segment across major cities in India is seeing a significant price appreciation. According to a recent report by real estate agency ANAROCK, the price of luxury homes in seven major Indian cities has appreciated by 24 per cent. The cost of the homes has risen from approximately Rs 12,400 per sqft in 2018 to Rs 15,350 per sqft in 2023. This is in contrast to the affordable, mid and premium home segments, which saw modest price rises.

Anuj Puri, the Chairman of ANAROCK stated, "Extremely robust sales ably supported by good supply pipeline have resulted in luxury homes witnessing the most significant price appreciation. Considering the relative price stagnation in this segment in earlier years, a 24 per cent increase over the last five years is notable. In the pre-pandemic period in 2019, sales in this segment were anything but stellar and this reflected in non-existent or negligible price growth."

Demand for luxury homes in major Indian cities

As per ANAROCK, Hyderabad recorded the highest increase in the average price of luxury homes in five years. The price surged 42 per cent from Rs 7,450 per sqft in 2018 to Rs 10,580 per sqft in the first half of 2023. Bengaluru and Mumbai shared the second position with a 27 per cent hike in prices.

City-wise break-up of demand for luxury housing

Seven cities- Hyderabad, the National Capital Region, Bengaluru, Chennai, Mumbai Metropolitan Region, Kolkata and Pune- were surveyed by ANAROCK across budget segments. In the affordable segment (below Rs 40 lakh), the increase in prices was 15 per cent all over the country. NCR recorded the highest rise, at 19 per cent.

Mohit Goel, Managing Director, Omaxe Ltd. commented, "experiencing a hitherto unseen momentum, Gurugram, with a three-fold increase in the sale of luxury units, has emerged as the epicentre of luxury real estate. Even otherwise, the NCR market like Faridabad has emerged as the strong market for luxury housing and leads in the sale in this segment. Growing demand for expansive residences and opulent facilities is further solidifying the region’s surge in luxury real estate surge. Investments from NRIs add to this demand. With ample supply, festivities, and stable interest rates, we expect a promising 2023."

In terms of mid and premium categories (Rs 40 lakh to Rs 1.5 crore), the jump in prices pan-India was 18 per cent. Hyderabad registered a surge of 23 per cent, making it the biggest in the category. In the luxury home market, with the exception of Kolkata, Pune and Chennai, all cities saw a jump of 20 per cent or more.

Some notable trends in the ANAROCK study

Hyderabad witnessed the highest increase for luxury properties, but the city's current average cost in this segment remains the lowest in the surveyed cities at Rs10,580 per sqft in 2023.

The MMR recorded the highest average price across all housing categories. The average cost for luxury homes stands at approx. Rs 29,260 sqft. In the mid and premium sector, the price is Rs 12,022 per sqft. and in the affordable range, the cost comes up to Rs 5,630 per sqft.

After Mumbai Metropolitan Region, Pune had the second-highest average price in the mid segment housing category at Rs 7,578 per sqft.

Chennai recorded the second-highest average luxury housing price at approximately Rs 15,250 per sqft.