Developers have doubled down on spending on premium housing as economic launches stagnate

The demand for larger housing in India’s residential real estate sector is set to increase over the next decade, this is in line with a significant shift seen in the last five years, where there has been a staggering 1,000% increase in launches of high-end residential units priced above Rs 1.5 crore between 2019 and 2023.

Meanwhile, new launches of units priced below Rs 75 lakh, including affordable housing, remained stable across the top seven cities in the country, while sales increased by 27 percent.

With declining inventory levels, which are currently the lowest in a decade, and average prices rising 26 percent over five years, the scales appear to be tilted towards the premium end of the market, where developers are looking for increased demand and better margins. Although affordability is better now than in 2014, the increase in big-ticket launches coupled with stagnation in affordable housing options raises questions about affordability going forward, especially for first-time buyers.

With decreasing levels of inventory, there appears to be a bias towards the premium end of the market.