Knight Frank India reports that sales of residences priced at up to Rs 50 lakh decreased 16 percent in 2017 to about 98,000 units in eight key cities as a result of rising real estate costs and high borrowing rates.
The market for inexpensive houses in Delhi-NCR saw a 44% decline in sales from 13,290 units in 2022 to 7,487 units last year.
Even yet, the total number of property sales in the top eight cities—Delhi-NCR, Mumbai Metropolitan Region (MMR), Chennai, Kolkata, Bengaluru, Pune, Hyderabad, and Ahmedabad—rose by 5% yearly to 3,29,907 units in 2023, including all price ranges.
The supply of new dwellings priced up to Rs 50 lakh decreased by 20% in 2023 compared to the previous year. The sales of reasonably priced houses decreased as a consequence of this.
Due to increased demand in the mid-income and luxury house categories, total sales hit a 10-year high.
Through a webinar on Wednesday, real estate consultancy Knight Frank India revealed its findings, which indicated that sales of residential homes priced at Rs 50 lakh and lower decreased from 1,17,131 units in 2022 to 97,983 units last year.
As a consequence, the proportion of affordable dwellings in all housing transactions has decreased from 37% to 30%.
The percentage of houses that cost more than Rs 1 crore increased from 27% to 34% in 2023.
The consultant blamed the decline in sales of inexpensive houses on muted demand brought on by the confluence of increasing real estate values, higher mortgage rates, and the pandemic’s disproportionately negative impacts on this particular sector.
2018 saw 54% of all sales be comprised of affordable housing.
The number of affordable houses sold in Mumbai decreased by 6% from 41,595 units in 2022 to 39,093 units in 2023.
Bengaluru saw the greatest yearly drop in sales of inexpensive segment units, falling from 15,205 units in 2022 to 8,141 units in 2023—a 46% decrease.
Knight Frank India CMD According to Shishir Baijal, “The residential market continues its onward march to achieve another watershed year in 2023. Characterized by a shift towards more expensive properties.” According to him, the country’s solid economic foundations are driving this expansion by giving investors the financial assurance to make long-term investments.
Furthermore, despite a consistent increase in costs, house purchasers have benefited from a substantial improvement in housing affordability over the last ten years. Having said that, the cheap category, which had lower sales volumes, is showing some symptoms of concern, according to Baijal.
According to Knight Frank, overall home sales rose by 5% to 3,29,097 units in 2023 from 3,12,666 units the year before.
Sales in Mumbai increased by 2% to 86,871 units from 85,169 units. Delhi-NCR had a 3% increase in housing sales, from 58,460 to 60,002 units.
Sales in Pune increased by 13% to 49,266 units from 43,409 units, while sales in Bengaluru increased by 1% to 54,046 units from 53,363 units.
Chennai had a 5% increase in housing sales, from 14,248 to 14,920 units. Sales in Hyderabad increased by 6% to 32,880 units from 31,046 units.
Kolkata saw a 16% growth in 2023 to 14,999 units from 12,909 units the year before. Ahmedabad had a 15% increase in housing sales in 2023, from 14,062 units to 16,113 units.
