Luxury Housing Market Expands While Mid-Income Faces Supply Strain
The Indian real estate market is witnessing a growing divide, with the luxury housing sector flourishing, while mid-income housing struggles due to oversupply and market saturation. High-end properties are seeing robust demand, particularly in cities like Mumbai, Delhi, and Bengaluru, with buyers primarily from the high-net-worth segment, investing funds from stock market gains. Properties above ₹50 crore are in strong demand, with inventory expected to be absorbed within the next few quarters.
In Mumbai, luxury housing has seen a significant boost, with over 98,000 apartments sold in 2024 alone. However, the market for properties priced between ₹20 crore and ₹50 crore is facing challenges, with a surplus of unsold inventory. Experts predict that it could take five or more years to clear this stock, highlighting a slowdown in this particular price range.
In contrast, the mid-income housing segment is grappling with an oversupply of premium properties, especially in areas like Gurugram and the National Capital Region (NCR). The demand in the ₹4 crore to ₹5 crore range has plateaued, leaving developers with significant inventory.
On the other hand, properties priced between ₹2 crore and ₹3 crore continue to see healthy demand, offering a silver lining for developers focused on this segment.
Affordable housing, which once formed the backbone of the real estate market, is also facing a significant decline in demand. The increasing costs of construction and regulatory taxes have driven up prices, making affordable housing less accessible. In Mumbai, government levies now account for nearly 50% of a flat’s cost, further hampering affordability.
While the luxury real estate sector remains buoyant, experts caution against excessive supply, particularly in the ₹20 crore to ₹50 crore range. For mid-income housing, developers must carefully manage inventory to avoid overbuilding and ensure long-term market stability.
