+
Mid-to-affordable homes feel high mortgage rate pinch
Real Estate

Mid-to-affordable homes feel high mortgage rate pinch

On the heels of rising mortgage rates, India's real estate sector anticipates a slowdown in growth across cheap homes priced below Rs 50 lakhs and mid-segment homes priced between Rs 50 lakh and Rs 1 crore. According to various developers and analysts, the ultra luxury market, which includes residential units worth more over Rs 1 crore, is still on a roll.

Growth in sales of cheap to mid-range homes is predicted to decelerate to 10-15% in 2023 versus 2022. Growth was stronger last year, at 35-40%, compared to Covid-affected 2021.

Super luxury property sales are predicted to rise rapidly due to a lack of supply and buyers' high personal wealth.

For example, in February 2023, Mumbai saw a new peak in income collections from property registration, reaching Rs 1,102 crore. It was a 79% increase over February 2022 collections last year (Rs 615 crore). As revenue increased, property registrations decreased by 8% to 9,511 in February 2023 from 10,379 in February 2018.

"This (rise in registration revenue while actual registrations fall) definitely implies that sales of big-ticket price homes (luxury homes) had a considerable upward movement," Chairman of the ANAROCK Group, Anuj Puri.

According to ANAROCK Research, out of the 3.65 lakh units sold across the top seven cities in 2022, around 18% (approx. 65,680 units) were in the luxury category with prices above 1.5 crore. In comparison, just 7% (17,740 units) of the total 2.61 lakh units sold in 2019 were classified as luxury.

According to another developer, DLF's recent enormous success with its Gurugram offers demonstrates that there is a shortage of appropriate super-luxury home supplies by high-grade branded developers.

This buyer sector is unaffected by economic downturns and employment market volatility because most are already well-capitalised. Moreover, most of these buyers are using personal wealth or cash (free money) for purchases, said Vivek Rathi, Director – Research, Knight Frank India.

According to Knight Frank's data, roughly 45 percent of such high net worth buyers are "cash buyers" - utilising their own funds rather than loans.

According to Prashant Thakur, Senior Director and Head of Research at ANAROCK Group, early indications show a 5-10% drop in property sales in the first two months of 2023 compared to the previous quarter as of February end (October-December 2022).

Closures are taking longer currently. Formerly, a site inspection to transaction conclusion may take up to 65 days. However, the deadline has now been greatly extended. IT centres such as Bangalore, Hyderabad, and Pune would experience the greatest impact on demand. Thakur stated.

CY2022 was a strong year in terms of launches and inventory levels are currently up. As a result, unsold stock is also up by 4-5 per cent, market sources said.

Also Read
CERC appoints Jishnu Baruah as a new chairman
NCLAT dismisses HDFC's appeal against sale of IL&FS BKC property

On the heels of rising mortgage rates, India's real estate sector anticipates a slowdown in growth across cheap homes priced below Rs 50 lakhs and mid-segment homes priced between Rs 50 lakh and Rs 1 crore. According to various developers and analysts, the ultra luxury market, which includes residential units worth more over Rs 1 crore, is still on a roll. Growth in sales of cheap to mid-range homes is predicted to decelerate to 10-15% in 2023 versus 2022. Growth was stronger last year, at 35-40%, compared to Covid-affected 2021. Super luxury property sales are predicted to rise rapidly due to a lack of supply and buyers' high personal wealth. For example, in February 2023, Mumbai saw a new peak in income collections from property registration, reaching Rs 1,102 crore. It was a 79% increase over February 2022 collections last year (Rs 615 crore). As revenue increased, property registrations decreased by 8% to 9,511 in February 2023 from 10,379 in February 2018. This (rise in registration revenue while actual registrations fall) definitely implies that sales of big-ticket price homes (luxury homes) had a considerable upward movement, Chairman of the ANAROCK Group, Anuj Puri. According to ANAROCK Research, out of the 3.65 lakh units sold across the top seven cities in 2022, around 18% (approx. 65,680 units) were in the luxury category with prices above 1.5 crore. In comparison, just 7% (17,740 units) of the total 2.61 lakh units sold in 2019 were classified as luxury. According to another developer, DLF's recent enormous success with its Gurugram offers demonstrates that there is a shortage of appropriate super-luxury home supplies by high-grade branded developers. This buyer sector is unaffected by economic downturns and employment market volatility because most are already well-capitalised. Moreover, most of these buyers are using personal wealth or cash (free money) for purchases, said Vivek Rathi, Director – Research, Knight Frank India. According to Knight Frank's data, roughly 45 percent of such high net worth buyers are cash buyers - utilising their own funds rather than loans. According to Prashant Thakur, Senior Director and Head of Research at ANAROCK Group, early indications show a 5-10% drop in property sales in the first two months of 2023 compared to the previous quarter as of February end (October-December 2022). Closures are taking longer currently. Formerly, a site inspection to transaction conclusion may take up to 65 days. However, the deadline has now been greatly extended. IT centres such as Bangalore, Hyderabad, and Pune would experience the greatest impact on demand. Thakur stated. CY2022 was a strong year in terms of launches and inventory levels are currently up. As a result, unsold stock is also up by 4-5 per cent, market sources said. Also Read CERC appoints Jishnu Baruah as a new chairman NCLAT dismisses HDFC's appeal against sale of IL&FS BKC property

Related Stories

Gold Stories

Next Story
Real Estate

Anshul Singhal launches Vantrock with Rs 42 billion development plan

Real estate professional Anshul Singhal has launched Vantrock Real Assets Private Limited (VRAPL), a Mumbai-headquartered platform focused initially on warehousing, industrial and logistics parks. The company plans to develop approximately 11.5 million sq ft of assets, with an estimated gross development value (GDV) of Rs 42 billion (approximately USD 434 million) on completion.The first phase will cover around 3 million sq ft across the National Capital Region (NCR), Bengaluru and Pune, with an estimated development value of Rs 11 billion (approximately USD 113 million). Construction is sched..

Next Story
Infrastructure Transport

Afcons wins CII award for biodiversity management

Afcons Infrastructure has received the Confederation of Indian Industry (CII) National Award for Environmental Best Practices 2026 in the Biodiversity Management category for its work on the Mumbai-Ahmedabad High Speed Rail Project’s C-2 package.The award was presented at a ceremony in Chennai on 9 October 2026. It was received by Mihir Mishra, Vice-President, CPE, and Sumon Paul, Assistant General Manager, HSE, along with the Afcons team.The project adopted several resource recovery and waste management practices. These included recycling concrete washout waste to recover sand, aggregates a..

Next Story
Technology

Indian businesses lead globally in planned AI investment, says Autodesk

Indian organisations are moving towards deeper integration of artificial intelligence (AI), digital technologies and sustainability into business operations, according to Autodesk’s 2026 State of Design & Make report. The fourth edition of the annual study highlights growing AI adoption, measurable outcomes from digital transformation and the role of sustainability in long-term business growth.The report found that 64 per cent of Indian organisations are approaching or have achieved their current AI goals. While 88 per cent believe AI will enhance their industry, up from 78 per cent in 2..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code