Chart Beat: Share of luxury homes is rising

The share of premium and luxury housing has risen to about 75% year-to-date in FY24 from 60% in FY20, according to Jefferies India analyst Abhinav Sinha (Photo: Mint)
The share of premium and luxury housing has risen to about 75% year-to-date in FY24 from 60% in FY20, according to Jefferies India analyst Abhinav Sinha (Photo: Mint)

Summary

  • The average price of houses purchased is over 50% higher than it was pre-covid, according to an analyst at Jefferies India

Since the pandemic, India has seen a K-shaped recovery in many sectors. One of these is the residential real estate sector, where sales of premium or luxury housing have been on the rise. “Our analysis of the Propequity data shows that the average price of houses purchased is more than 50% higher than it was pre-covid. The share of premium and luxury housing has risen to about 75% year-to-date in FY24 versus 60% in FY20," Abhinav Sinha, an analyst at Jefferies India, wrote in a report on 26 November.

This trend has had a positive effect on shares of real estate companies and the Nifty Realty index has gained about 67% so far this year. “Demand for both luxury and ultra-luxury properties has surged since the pandemic, with HNIs (high-net-worth individuals) and ultra-HNIs buying such homes for investment, personal use, or both," said Anuj Puri, chairman at Anarock Group. To be sure, a pause in interest rate hikes by the Reserve Bank of India has also boosted sentiment for real-estate stocks.

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