Average price of luxury homes appreciates 24 percent in top 7 cities

Luxury homes across the country have recorded the highest average price appreciation of 24 percent in the last five years with Hyderabad recording the highest average price appreciation

Luxury homes across the country have recorded the highest average price appreciation of 24 percent in the last five years with Hyderabad recording the highest average price appreciation followed by the Mumbai Metropolitan Region (MMR) and Bengaluru, a report by Anarock Research showed.

Average prices of homes priced more than Rs 1.5 crore in the top seven cities saw the highest appreciation, going from Rs 12,400 per sq ft in 2018 to approximately Rs 15,350 per sq ft today. The seven cities included the National Capital Region (NCR), Hyderabad, MMR, Bengaluru, Pune, Chennai and Kolkata.

Among these top seven areas, Hyderabad recorded the highest jump of 42 percent in the average price of luxury homes in this period, from approximately Rs 7,450 per sq ft in 2018 to about Rs 10,580 per sq ft in the first half of 2023. Bengaluru and MMR recorded the second-highest average price hike in this segment at around 27 percent each.

In Bengaluru, the average price of luxury homes in 2018 stood at Rs 10,210 per sq ft and has since risen to Rs 12,970 per sq ft. In MMR, the average price in the Rs 1.5 crore category back in 2018 was Rs 23,119 per sq ft while currently it is Rs 29,260 per sq ft.

Homes priced above Rs 40 lakh but below the luxury category notched up a more modest 15 percent price appreciation over the same period. The average price in this category across the top seven cities was Rs 3,750 per sq ft in 2018. Currently, it averages out at Rs 4,310 per sq ft.

At 19 percent, NCR saw the highest average price jump in this category, from Rs 3,120 per sq ft in 2018 to Rs 3,700 per sq ft in the first half of calendar 2023. Budget homes in Hyderabad saw the second-highest price appreciation of 16 percent in this period, from Rs 3,460 per sq ft in 2018 to Rs 4,000 per sq ft in H1 2023.

"Extremely robust sales ably supported by a good supply pipeline have resulted in luxury homes witnessing the most significant price appreciation. Considering the relative price stagnation in this segment in earlier years, a 24 percent increase over the last five years is notable. In the pre-pandemic period in 2019, sales in this segment were anything but stellar and this reflected in non-existent or negligible price growth," said Anuj Puri, chairman, Anarock Group.

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

“Mid and premium segment homes priced at Rs 80 lakh to Rs 1.5 crore together saw the average price go up by approximately 18 percent in this period across the top seven cities, from Rs 6,050 per sq ft in 2018 to Rs 7,120 per sq ft in 2023,” said Puri. “Hyderabad is already a standout performer on other real estate charts, and the appetite for luxury housing here has been more than apparent. The fact that it notched up the highest price appreciation at 23 percent in this category stands to reason.”