Luxury home sales: Mumbai reports Rs 11,400 crore of luxury home sales in first half of 2023, says report

Sales of luxury houses costing Rs 10 crore and above in Mumbai increased over 60 percent to Rs 11,400 crore in the first half of 2023 from the preceding half-year

Sales of luxury houses costing Rs 10 crore and above in Mumbai increased over 60 percent to Rs 11,400 crore in the first half of 2023 from the preceding half-year, coinciding with a boom in residential property sales, according to a report by India Sotheby’s International Realty and CRE Matrix. Sales in the previous six-month period were Rs 7,073 crore.

Of this, sales of luxury homes in Mumbai’s primary market – units sold for the first time – climbed to Rs 8,817 crore, the highest half-yearly sales since at least the first half of 2018, according to the report. The sales exceeded the previous record of Rs 6,724 crore in the first half of 2021 by 31 percent.

The contribution of luxury home sales by value in the overall primary market was 18 percent in H1, exceeding the average of 13 percent during 2018-2022, according to the report.

Sales increased on account of higher demand from industrialists, Bollywood celebrities, and high-salaried employees, the two real estate consultant companies said in a statement issued on July 24. The momentum in luxury home sales continued even as interest rates on home loans increased.

Sales in the secondary market, at Rs 2,583 crore in H1 of 2023, were the second-highest in five years.

Wealth creation

According to the report, there was a 47 percent increase in the number of luxury units sold in the primary and secondary markets in Mumbai in H1 of 2023 from the second half of 2022. This was the highest half-yearly increase in unit sales in the past five years, except the jump in Covid-impacted H2 of 2020.

Unit sales increased 27 percent from a year earlier, evidence of robust and consistent increase in demand for luxury housing. The first half of this year also shattered the rolling average record – 84 percent growth – compared with the average units sold (about 290) since 2018, the report stated.

"The increase in the sales of ultra-luxury housing units in H1 CY’ 23 has been a big positive,” said Amit Goyal, managing director of India Sotheby's International Realty. "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."

Rs 40-70 crore bracket

Sales of units costing Rs 40 crore to Rs 70 crore grew 64 percent in the past 18 months, with 64 units sold, according to the report. That compares with 39 units sold in the preceding 18-month period. The figure even surpassed the 36-month period sales of 57 units in this segment.

However, the Rs 10 crore to Rs 20 crore segment still commanded about 71 percent of sales in the luxury segment, the report added.

"Indians are getting richer and they are not shying from flaunting their wealth. The Richie Rich is now eyeing larger homes than ever before with a clear preference for ocean views, higher floors and amenities galore," said Abhishek Kiran Gupta, founder of CRE Matrix.

Where are luxury homes being sold?

The top 10 localities of Mumbai contributed 86 percent of the total sales value in the primary luxury housing market in Mumbai in H1 of 2023. In unit terms, this contribution stood at 80 percent.

While Worli contributed 31 percent to luxury sales in the top 10 localities, it was Malabar Hill, at Rs 1,580 crore, that recorded the highest increase (481 percent) in the value of luxury homes sold in H1 of this year compared with a year earlier.

There was also significant demand for luxury housing in localities in the western suburbs such as Andheri (West), Santacruz (West) and Bandra (West). Goregaon and Powai are emerging as preferred localities in this segment, the report stated.

Buyer profile

The report noted that 35 percent of the homebuyers in Mumbai’s primary luxury market are in the 25-45 year age category. As many as 55 percent of the contribution to this segment came from the 45-to-65 year age segment. This was the most consistent and largest age segment since 2018.

The 65-plus years' segment is also emerging as strong buyers as India’s senior citizens translate their business gains into real estate assets, the report noted.