The real estate industry in South India has seen significant transformation in recent years, with consumers’ preferences obviously moving from affordable to upscale housing. This pattern is evident in major cities such as Bengaluru, Chennai, and Hyderabad, where sales have been dominated by mid-range and premium housing segments.
Bengaluru: A Hub for Mid-Range and Premium Housing
In Bengaluru, mid-range and premium real estate, which ranges in price from ₹40 lakh to ₹1.5 crore, is highly sought after. This shift is a reflection of the middle and upper middle classes’ growing need for better living conditions. Demand has been further boosted by the city’s flourishing IT sector and infrastructure upgrades.
Chennai: Rising Preference for Premium Homes
As a result of this trend, a significant portion of Chennai’s homebuyers are drawn to mid-range and luxury homes. The city’s real estate market has responded appropriately as developers are focusing on projects that cater to this market segment. Professional migration, improved connectivity, and faster economic growth are some of the reasons for this shift.
Hyderabad: Premium Housing Takes the Lead
In Hyderabad, there is also a greater need for high-end real estate. The city has attracted a lot of professionals due to its expanding IT industry and affordable real estate. Developers have begun projects that meet the demands of this discerning clientele due to the increased demand for expensive residences brought on by this migration. Hyderabad, which is just behind Mumbai and the National Capital Region (NCR), became a formidable competitor in India’s ultra-luxury real estate market in 2024. An incredible ₹530 billion was the total sales value of homes over ₹100 billion in key Indian cities this year. NCR (Delhi/Gurgaon) sold 795 units, while the Mumbai Metropolitan Region (MMR) sold 928 units, leading the market. Hyderabad’s remarkable sales of 689 units demonstrate the city’s increasing demand for ultra-luxury living. The city’s strong economic growth and the increased purchasing power of its wealthy class are reflected in this surge. A change in the dynamics of luxury real estate beyond conventional hotspots like Mumbai and Delhi is indicated by Hyderabad’s robust demand for premium real estate, notwithstanding market volatility.
Decline in Affordable Housing
The demand for high-end and luxury real estate has increased, while the demand for affordable real estate has decreased. At the national level, the share of sales of affordable housing decreased from 37% in the first quarter of 2019 to 20% in the first quarter of 2024. This tendency reflects the changing consumer preferences and economic conditions. It is clear that the focus in South Indian cities has shifted from low-cost building to mid-range and luxury housing.
Market Dynamics and Future Outlook
Luxury home is becoming more and more popular for several reasons:
- Economic Growth: South India’s consistent economic expansion has increased the purchasing power of its citizens.
- Lifestyle Aspirations: More and more people are choosing larger homes with modern amenities, especially in coveted neighborhoods.
- Developer Focus:These offers have increased as a result of developers planning their projects to cater to the mid- and high-end sectors after noticing the trend.
However, the decline in affordable housing raises concerns about inclusion in the housing market. In order to address this issue, stakeholders suggest that government initiatives aimed at developers and buyers should spark renewed interest in and investment in the affordable market.
In conclusion, the major cities of South India are seeing an increase in the number of luxury and premium properties. Comprehensive urban development requires a balanced approach that ensures the supply of cheap housing, even though this is a reflection of consumer choices and economic growth.