Luxury home sales drop, budget houses boom

Mumbai: The city’s realty sector is worried as the demand for luxury homes dropped drastically against a sharp hike in the sales of budget category houses, in the first half of 2025, latest industry data has revealed.

As per data released by ANAROCK Group, the inventory of unsold deluxe homes – in the Rs. 2.50-crore plus range – has shot up by 36 pc in Q1, first time since 2022.

The figures are startling – 8,420 units remain unsold in Mumbai compared with 6,180 units during the Q1 2024-end – a first since 2022 when unsold luxury housing stock saw an annual increase.

In contrast, the sales of various categories of budget houses, sub-2.50 cr, notched a significant increase of 6 pc from Jan-May 2025 – a record 64,461 properties registered, compared with 60,818 during the same period in 2024.

ANAROCK Group Chairman Anuj Puri attributed it to several factors including considerable new unit additions in the luxury sector - 16,480 (2024) plus 5,294 (2025).

“While demand for these homes continues to remain strong, skyrocketing prices and headwinds like global economic slowdown have hit the sales of these homes in the past one year,” Puri pointed out.

He added that in Q1-2023 high-end unsold stocks in Mumbai declined by 29 pc – from 18,340 units (Q1 2022-end) to nearly 13,040 units (Q1 2023-end), and by Q1 2024-end, the unsold luxury stocks fell by a significant 53 pc to around 6,180 units.

Adding colour to a gloomy scenario is the boom in the budget homes category which notched an unprecedented 64,461 property registrations in Mumbai from Jan-May, 2025 – against 60,818 registrations during the same period in 2024, as per data of the Inspector General of Registrations.

The average ticket prices of these properties stood at Rs 1.59 cr, the highest since 2019, and in 2021, the average prices of properties sold was the lowest at Rs 1.02 crore. The government mopped up a handsome Rs 5,695 crore from Jan-May 2025 (against Rs. 4,860 in Jan-May 2024), a 17 pc annual jump.

ANAROCK research found that in Q1-2025, as many as 21,930 units were sold in Mumbai which was 28 pc lower than the sales witnessed in Q1-2024.

A key factor behind the surge in property registrations from Jan-May 2025 is credited to the 3.9 pc hike in Maharashtra's ready reckoner rates for FY26.

Real estate experts-speak:

Realtor Nitin Sunderji Shah, Partner, Shri Om Sai Developers said that luxury home buyers prefer mega-housing complexes with extra amenities like swimming pool-club houses, etc.

“They shun stand-alone buildings, especially if they are the redeveloped category owing to ‘status disparity’. Some discerning buyers prefer row-houses, independent bungalows in large complexes, so many luxury units are languishing,” Shah told The Perfect Voice.

Realty consultant R. K. Kamble said that besides the usual factors, people have no savings for property investments, the hiccups witnessed in the stock markets, the prices of gold, the current political situation, etc., which weigh on public sentiments, particularly in the middle-upper segments.