India’s real estate market in November 2024 witnessed a pronounced surge in demand, particularly in the premium and luxury housing segments. According to a recent report by Nuvama, this demand increase has significantly outpaced the pace of new property launches, marking a key trend in the country’s real estate sector. The premiumisation effect is evident, with top cities seeing an increase in property prices, especially in the National Capital Region (NCR), which recorded an impressive 44% year-on-year price surge.
While demand for high-end properties has risen steadily, the number of new property launches has declined sharply. The report highlights that in the top seven cities, property supply by volume dropped by 53% YoY, while demand fell just 7%, underscoring a growing imbalance between supply and demand. By value, however, the supply of new properties has seen a more pronounced decrease, dropping by 44%, even as demand has surged by 16% YoY. This divergence indicates that developers are prioritising premium offerings, reflecting a broader market shift towards luxury housing.
This surge in demand has driven up prices across major cities, including Kolkata, where prices rose by 37%, and in Mumbai Metropolitan Region (MMR) and Bengaluru, where they increased by 14-17%. The overall rise in prices is a direct consequence of the booming premium segment, which has set new benchmarks for property valuations. Unsurprisingly, sales have followed suit, with the NCR seeing a 151% YoY increase in property sales, significantly outpacing other cities such as Chennai and Kolkata. However, Hyderabad saw a decline in sales, highlighting regional variations in the property market.
From a sustainability perspective, the growing demand for premium properties raises concerns about the long-term environmental and urban implications. As cities continue to experience rapid growth, the push for luxury housing could further strain infrastructure and resources. Developers must consider integrating eco-friendly designs and sustainable construction practices into these high-end projects. Moreover, with declining launches and increasing demand, urban planners need to ensure that future developments are aligned with smart growth principles that balance luxury with the needs of all residents. The real estate market’s future hinges on its ability to manage growth sustainably while meeting the evolving demands of affluent buyers.
