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Luxury segment dominates new housing launches in Q1 2024 with 34% share: Report
The affordable housing segment witnesses a decline, holding just 13% of launches this quarter. Developers hesitant to invest in this segment due to low margins
The high-end and luxury segment continued to drive growth of the real estate sector with 34% share in new launches in the first quarter of 2024, said a report by Cushman & Wakefield.
According to the report, the total housing unit launches across top 8 cities stood at 69,000, with Mumbai and Pune accounting for the highest contributions with 28% and 16% respectively. This was followed by Hyderabad and Bengaluru with 16% and 13%.
While the total launches represent a modest 7% decline from a strong Q4 2023 (74,344 units) and a 15% decrease compared to Q1 2023 (81,167 units), it remains above the average quarterly launches observed in 2022 (67,960 units), another positive year for the sector.
New housing supply has increased in Bengaluru and Mumbai but declined in Delhi-NCR, Chennai, Hyderabad, Pune, Kolkata, and Ahmedabad.
The high-end and luxury segment continued its reign in the quarter, capturing approximately 34% of launches in Q1-2024, a trend that began in recent years and reflects evolving homebuyer aspirations for enhanced lifestyles. This segment's share has steadily increased from a mere 13-14% in 2019 to more than 30% post 2022, it showed.
Mid-segment housing continues to be the volume leader, accounting for over 50% of launches, consistent with the past 3-4 years.
Affordable segment witnesses a decline
The affordable housing segment, meanwhile, saw a decline, holding just 13% of launches this quarter. Developers may be hesitant to invest in this segment due to potentially lower margins and stricter regulations for claiming incentives, particularly when high-end and luxury, and mid-segments are experiencing high demand.
The report also said that listed and large and regionally reputed, are driving residential launches across cities. According to the data, over 38% of Q1 2024 launches originated from listed and reputed developers.
NCR captures 61% share of the new launches
In NCR, high-end and luxury captures 61% of the total launches, with Gurugram leading the way and Noida contributing the highest of the mid-segment launches (26%)
In the first quarter of 2024, Mumbai’s residential sector witnessed launch of 19,461 units, a 21% growth over previous quarter but in-line with activity witnessed in the same quarter last year. Mid-segments dominated Mumbai launches with 61% share.
Rising number of re-development projects, particularly across the western suburbs prime and western suburbs markets have added to the rental housing demand and continued to result in 5-6% growth in rental values from the previous quarter.
Bengaluru witnessed launch of nearly 8,850 units in Q1 2024, a 14% growth on an annual basis. Branded and listed developers contributed around 53% of residential launches in the quarter. While it may be lower than the 70% share recorded in the previous quarter, the pipeline of unit launches by reputed developers does look strong.
Shalin Raina, Managing Director, Residential Services, Cushman & Wakefield said, “Over the past year, a significant rise in demand for high-end and luxury properties has emerged at both national and local levels. This shift reflects a change in homebuyers’ growing desire to invest in a place not only to live, but as a high-quality asset that reflects their lifestyle aspirations."
