Over half the number of luxury homes launched in India over the last three years remained unsold reflecting a muted demand for such homes in the real estate market, a recent study has found.
According to data collected by real estate portal PropTiger.com, a total of 1,131 housing units, priced over Rs 7 crore, were launched in India’s nine prime residential markets during the three year period between December 2016 and December 2019. Of these, 577 units or 51 per cent remained unsold as of January 2020.
Similarly, a total of 3,656 units, priced between Rs 5 crore and Rs 7 crore, were launched in these markets in the past three years, of which nearly 55 per cent remains unsold. Among property units priced between Rs 3 crore and Rs 5 crore, 56 per cent of the stock remained unsold out of the total 8,503 units which were launched during this period, data show.
“Real estate in India has been under immense pressure because of an on-going demand slowdown. This has impacted the residential real estate sector across the board, including the luxury housing segment. The demand for luxury homes fell post-demonetisation, and that trend has not changed much since. The on-going crisis involving the coronavirus pandemic is likely to further impact demand across the residential real estate sector in H1 FY21, including luxury housing,” says Dhruv Agarwala, Group CEO, Housing.com, Makaan.com, and PropTiger.com.
In terms of absolute numbers, the financial capital of India, Mumbai, has the highest number of unsold luxury units (30,015), followed by India’s pharmaceutical capital Hyderabad (8,554) and the Silicon Valley of India, Bengaluru (5,794) in third place, according to the Proptiger report.
Agarwala, however, expects renewed interest from NRI customers in India’s luxury housing segment in the event the fall in the value of the Indian rupee continues.
“The Indian currency recently fell beyond Rs 77 against the US dollar. This puts NRI homebuyers in an advantageous position as they would find buying luxury homes a relatively more attractive investment option than before,” further added Agarwala.
The cities covered in the analysis are Ahmedabad (includes Gandhinagar), Bengaluru, Chennai, Gurugram (includes Bhiwadi, Dharuhera and Sohna), Hyderabad, Kolkata, Mumbai (includes Navi Mumbai and Thane), Pune and Noida (includes Greater Noida, Noida Extension and Yamuna Expressway).
