Sales Of Homes Costing Up To Rs 50 Lakh Dip 16% Last Year; Total Sales Hit 10-year High: Report

Sales of homes costing up to Rs 50 lakh fell 16% 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% 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% 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% from 37%.

The share of homes costing above Rs 1 crore grew to 34% in 2023 from 27% 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%.

Mumbai saw a 6% 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% to 8,141 units in 2023 from 15,205 units in 2022.

The Delhi-NCR market witnessed 44% 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% to 3,29,097 units in 2023 from 3,12,666 units in the previous year.

In Mumbai, sales grew 2% to 86,871 units from 85,169 units. Housing sales in Delhi-NCR rose 3 % to 60,002 units from 58,460 units.

Bengaluru saw an increase of 1% in sales to 54,046 units from 53,363 units, while Pune witnessed 13% rise in sales to 49,266 units from 43,409 units.

Housing sales in Chennai rose 5% to 14,920 units from 14,248 units. In Hyderabad, sales grew 6% to 32,880 units from 31,046 units.

Kolkata saw an increase of 16% to 14,999 units in 2023 from 12,909 units in the previous year. Housing sales in Ahmedabad rose 15% to 16,113 units in 2023 from 14,062 units in the previous year.