Luxury homes See 24% Price Growth Since 2018: Anarock

In the Indian real estate sector, luxury housing has evolved gradually. NCR, Bangalore, Mumbai, Chennai, Kolkata, Pune, and Hyderabad are the most sought-after luxury property centres in India.

Since the pandemic, sales and new supply have multiplied in the luxury housing segment, which has been an undeniable boost for the segment. Prices had to increase to meet demand.

Contrastingly, the affordable segment - which was on a high before Covid-19 - saw compromised sales that also reflected in its average price growth.

According to ANAROCK Research data analysis of average price trends in the top 7 cities across various price ranges, luxury properties have seen the highest average price growth of 24% over the past five years.

The average price of a luxury residence in the top 7 cities in 2018 was roughly Rs 12,400 per square foot, and as of 2023, that price has risen to roughly Rs 15,350 per square foot.

Hyderabad saw the most increase in the average price of luxury residences among the top 7 cities during this time, rising by 42%, from approx. Rs 7,450/sq. ft. in 2018 to over Rs 10,580/sq. ft. in the first half of 2023. In this price range, Bengaluru and MMR saw the second-highest average price increases, at 27% apiece.

Avg. Price Appreciation in Top 7 Cities (INR/sq.ft.) - 2018 Vs 2023

Year	Affordable (Mid & Premium (INR 40 lakh - INR 1.5 Cr)Luxury (> INR 1.5 Cr)
2018	3750	6050	12400
2023	4310	7120	15350

Source: ANAROCK Research

While the affordable housing segment i.e. under Rs 40 lakh in price saw a relatively modest 15% price increase within the same time period. In 2018, the top 7 cities in this category charged an average of INR 3,750/sq ft. It currently costs INR 4,310/sq ft. on average.

In addition, NCR witnessed the largest average price increase in this category at 19%, rising from INR 3,120/sq ft. in 2018 to INR 3,700/sq ft. in H1 2023. Budget homes in Hyderabad witnessed the second-best price growth during this time, rising from INR 3,460/sq. ft. in 2018 to INR 4,000/sq. ft. in the first quarter of 2023.

Avg. Price Appreciation (%) across Budget Categories - 2018 Vs 2023

City	Affordable (Mid & Premium (INR 40 lakh - INR 1.5 Cr)Luxury (> INR 1.5 Cr)
NCR	19.00%	17.00%	22.00%
Kolkata	14.00%	17.00%	12.00%
MMR	15.00%	17.00%	27.00%
Pune	12.00%	15.00%	19.00%
Hyderabad	16.00%	23.00%	42.00%
Chennai	15.00%	16.00%	15.00%
Bangalore	13.00%	20.00%	27.00%
PAN INDIA	15.00%	18.00%	24.00%

Source: ANAROCK Research

Anuj Puri, Chairman - ANAROCK Group, says, "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% 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."

"Mid and premium segment homes priced INR 80 lakh to 1.5 Cr together saw the average price go up by approx. 18% in this period across the top 7 cities - from INR 6,050 per sq. ft. in 2018 to INR 7,120 per sq. ft. in 2023," says Puri. "Hyderabad is already a standout performer on other real estate charts, and the appetite for luxury housing here has been more than apparent. The fact that it notched up the highest price appreciation at 23% in this budget category stands to reason."