In a resounding testament to the growing affluence in India, the luxury housing market in Mumbai has experienced a remarkable surge in sales during the first half of 2023. According to a comprehensive report jointly published by India Sotheby’s International Realty and CRE Matrix, sales of luxury homes priced at Rs 10 crore and above reached a staggering Rs 11,400 crore, marking a remarkable 60 percent increase compared to the preceding six-month period, which recorded sales of Rs 7,073 crore.
The most significant surge was witnessed in Mumbai’s primary market, with luxury home sales totaling Rs 8,817 crore, the highest recorded half-yearly sales since at least the first half of 2018. This substantial increase surpassed the previous record set in the first half of 2021 by an impressive 31 percent. Notably, luxury homes’ value accounted for 18 percent of the overall primary market, surpassing the average of 13 percent observed during the period between 2018 and 2022.
Amit Goyal, the managing director of India Sotheby’s International Realty, expressed his optimism about Mumbai’s luxury housing market, stating, “With wealth creation in India growing at a fast pace, and the country’s wealthiest city Mumbai set to enter the list of top 20 cities with the greatest number of millionaires by 2023, we believe there’s an inherent strength in Mumbai’s luxury housing market which should continue in the future.”
The surge in demand for luxury homes has been attributed to a growing interest from industrialists, Bollywood celebrities, and high-salaried employees. Surprisingly, this robust momentum in luxury home sales continued despite an increase in interest rates on home loans.
In the secondary market, luxury home sales amounted to Rs 2,583 crore during H1 2023, marking the second-highest sales figure in the past five years.
The report highlighted a striking 47 percent increase in the number of luxury units sold in both primary and secondary markets in Mumbai during H1 2023 compared to the second half of 2022. This impressive growth represents the highest half-yearly increase in unit sales in the past five years, second only to the surge observed during the Covid-impacted H2 of 2020. In addition, unit sales increased by 27 percent from the previous year, indicating a consistent and robust demand for luxury housing.
The demand for luxury housing was evident across various price segments, with units costing Rs 40 crore to Rs 70 crore experiencing a substantial 64 percent growth in the past 18 months. This segment saw 64 units sold, surpassing the preceding 18-month period’s sales of 39 units. However, the Rs 10 crore to Rs 20 crore segment retained its dominant position, accounting for approximately 71 percent of luxury home sales.
The report also shed light on the preferred localities for luxury housing sales, with the top 10 localities in Mumbai contributing 86 percent of the total sales value in the primary luxury housing market during H1 2023. Malabar Hill emerged as the leader in terms of growth, recording a staggering 481 percent increase in the value of luxury homes sold compared to the previous year.
In terms of buyer demographics, 35 percent of the homebuyers in Mumbai’s primary luxury market belonged to the 25-45 year age category. The 45-to-65 year age segment was the most consistent and largest contributor, accounting for 55 percent of the segment’s sales since 2018. Moreover, the report highlighted the emergence of senior citizens, aged 65 and above, as strong buyers in the luxury housing market, as they translate their business gains into real estate assets.
The luxury housing market in Mumbai continues to flourish, and as the city’s wealth creation accelerates, experts believe this trend is set to continue in the foreseeable future. With Mumbai on track to become one of the top 20 cities with the highest number of millionaires, the demand for luxury homes from affluent individuals remains a driving force in the city’s property market.