Real estate market shows that the rich are not worried about an economic downturn

• Luxury housing supply share at 27% in Q3 2023, hits 5-year quarterly share high.
• Chennai is the only city to see a drop in new luxury supply between Q3 2023 and Q3 2018.
• Hyderabad has seen the highest new luxury supply among the top 7 cities in Q3 2023.

The markets may be jittery for a host of reasons ranging from geopolitics to macroeconomic trends around the world. The conflict in Gaza between Israel and Palestine adds to the already tense global economic conditions as a result of the Russia-Ukraine war. However, data shows that the rich are continuing to buy property in India which has prompted luxury housing supply share to hit a five year quarterly share high at 27% in Q3 2023.

An analysis of average price trends across the top seven cities in different budget categories, based on ANAROCK Research data, has revealed recently that luxury homes have seen the most significant price appreciation at 24% over the past five years.

Now, data shows that to meet the demand, 31,180 luxury homes (priced >₹1.5 Cr) were launched across the top 7 cities in Q3 2023, against 4,590 in Q3 2018.

A detailed look shows that not surprisingly, Hyderabad has seen the highest new luxury supply in Q3 2023 with approx. 14,340 units, followed by the Mumbai Metropolitan Region (MMR).

Prashant Thakur, Regional Director & Head – Research, ANAROCK Group, says, “Developers have been bullish about the luxury homes segment because of its superlative performance after the pandemic, with overall sales rising steeply across the top 7 cities. Post pandemic, homebuyers have been seeking bigger homes and apart from high-end amenities and good location, luxury housing is primarily defined by generous floor space.”

ANAROCK’s most recent consumer sentiment survey also reflects this trend. In the pre-Covid edition of the survey (H1 2019), 9% respondents preferred luxury homes priced >₹1.5 Cr while in the current edition of H1 2023, this share has risen to 16%.

Affordable homes experience a more muted rise

Contrastingly, the affordable segment - which was on a high before Covid-19 - saw compromised sales that also reflected in its average price growth.


Affordable homes priced below ₹40 lakh experienced a more modest 15% price appreciation during the same period. The average price in this category across the top 7 cities was ₹3,750 per square foot in 2018, and it now stands at ₹4,310 per square foot.

City-wise analysis: A 5-year comparison

The city-level supply trend reveals that Chennai is the only city to see a drop in new luxury supply between Q3 2023 and Q3 2018.

Hyderabad saw the highest new luxury supply among the top seven cities in Q3 2023. As many as 14,340 luxury units were launched in the city in Q3 2023, comprising a nearly 46% share of the total new luxury supply in the quarter.

The National Capital Region (NCR) has witnessed new luxury supply rise to 3,870 units in Q3 2023, against 930 units in the corresponding period of 2018. Similarly, Bengaluru has seen approximately 1,710 new luxury units launched in Q3 2023, against 290 units. Kolkata, meanwhile, has seen 1,030 luxury units launched in Q3 2023 while in Q3 2018, the new supply was under 120 units.