Sales of homes costing up to Rs 50 lakh fell 16 per cent last year to nearly 98,000 units across eight major cities due to a rise in property prices and high mortgage rate, according to Knight Frank India.
Nevertheless, overall housing sales, comprising all price points, rose 5 per cent annually to 3,29,907 units during 2023 across the top eight cities -- Delhi-NCR, Mumbai Metropolitan Region (MMR), Chennai, Kolkata, Bengaluru, Pune, Hyderabad and Ahmedabad.
New supply in homes costing up to Rs 50 lakh dropped 20 per cent in 2023 year-on-year. This also resulted in fall in sales of affordable homes.
The overall sales reached a 10-year high, driven by higher demand in the mid-income and luxury home segments.
Real estate consultant Knight Frank India on Wednesday released its report through a webinar, showing that sales of residential properties priced Rs 50 lakh and below fell to 97,983 units last year from 1,17,131 units in 2022.
As a result, the share of affordable homes in total housing sales has come down to 30 per cent from 37 per cent.
The share of homes costing above Rs 1 crore grew to 34 per cent in 2023 from 27 per cent a year ago.
Knight Frank India CMD Shishir Baijal said, "Characterised by a shift towards more expensive properties, the residential market continues its onward march to achieve another watershed year in 2023."
This growth is led by the strong economic fundamentals of the country that give buyers financial confidence to make long-term investments, he said.
"Furthermore, dramatic improvement in home affordability over the last decade has helped home buyers despite a steady rise in prices. Having said that, we can see some signs of distress in the affordable segment, which saw reduced sales volumes," Baijal said.
The consultant attributed the fall in sales of affordable homes to subdued demand because of the combined impact of rising property prices, increased home loan rates, and the disproportionately adverse effects of the pandemic in this category.
In 2018, the share of affordable homes in total sales was 54 per cent.
Mumbai saw a 6 per cent drop in sales of affordable homes to 39,093 units in 2023 from 41,595 units in the previous year.
The city that saw a maximum decline in affordable segment sales was Bengaluru with an annual decline of 46 per cent to 8,141 units in 2023 from 15,205 units in 2022.
The Delhi-NCR market witnessed 44 per cent fall in sales of affordable homes to 7,487 units last year from 13,290 units in 2022.
Knight Frank said the total housing sales increased 5 per cent to 3,29,097 units in 2023 from 3,12,666 units in the previous year.
In Mumbai, sales grew 2 per cent to 86,871 units from 85,169 units. Housing sales in Delhi-NCR rose 3 per cent to 60,002 units from 58,460 units.
Bengaluru saw an increase of 1 per cent in sales to 54,046 units from 53,363 units, while Pune witnessed 13 per cent rise in sales to 49,266 units from 43,409 units.
Housing sales in Chennai rose 5 per cent to 14,920 units from 14,248 units. In Hyderabad, sales grew 6 per cent to 32,880 units from 31,046 units.
Kolkata saw an increase of 16 per cent to 14,999 units in 2023 from 12,909 units in the previous year. Housing sales in Ahmedabad rose 15 per cent to 16,113 units in 2023 from 14,062 units in the previous year.