Luxury home prices surge 24% in top 7 cities: Report

New Delhi: Luxury homes have witnessed a 24% jump in prices over the past five years in India’s top seven cities, surpassing the appreciation in the affordable housing sector, according to data from Anarock Research said. The pandemic-induced shift in housing preferences has translated into heightened demand for luxury residences, subsequently driving up prices in this segment.

Prices of luxury homes in the top 7 cities in 2018 averaged out at approximately ₹12,400 per square feet and at this point in 2023, have increased to around ₹15,350 per square feet, it added.

Among the cities, Hyderabad emerged as the frontrunner in luxury home price growth, seeing a staggering 42% increase in average price from ₹7,450 per square foot in 2018. Bengaluru and the Mumbai Metropolitan Region (MMR) recorded a notable 27% appreciation each.

Bengaluru witnessed a rise from ₹10,210 per square foot in 2018 to ₹12,970 per square foot in the present year, while MMR’s luxury housing sector observed a surge from ₹23,119 per square foot to ₹29,260 per square foot over the same period.

In stark contrast, affordable housing, categorized as homes priced below ₹40 lakh, recorded a comparatively modest price growth of 15% during the same time frame. The average price in this segment across the top 7 cities rose from ₹3,750 per square foot in 2018 to ₹4,310 per square foot in 2023.

Within the affordable category, the National Capital Region (NCR) witnessed the most significant increase, with average prices rising by 19% to ₹3,700 per square foot in the first half of 2023. Hyderabad followed with a 16% appreciation, with prices climbing to ₹4,000 per square foot in H1 2023.

“The surge in sales coupled with an adequate supply pipeline has led to substantial price appreciation in the luxury housing segment. This 24% increase in value over five years is particularly noteworthy considering the relatively stagnant prices observed in earlier years. Conversely, the affordable housing sector, which had shown momentum before the pandemic, witnessed a dip in sales, subsequently impacting its price growth,” said Anuj Puri, Chairman - ANAROCK Group.

The report emphasized the evolving dynamics of the real estate market, with changing consumer preferences influencing price trends across various housing categories.