Mumbai's luxury housing market is booming, with an unsold inventory drop of 24% in the first quarter

Despite rising home prices, the luxury real estate market seems to have no dearth of buyers at least in the country’s largest real estate market, Mumbai. The latest data from market analyst firm Anarock shows that high demand for luxury homes in the Mumbai Metro Region (MMR) has led to a steep fall in unsold inventory of such homes during the March quarter.

Per Anarock Research, the number of unsold homes priced above Rs 2.5 crore has dropped 24 per cent year-on-year in Q1 2023 from 20,480 units to 15,520. In pre-Covid Q1 2019, MMR’s luxury stock was about 23,130 units.

“Luxury homes are driving housing sales across most cities since the first Covid-19 wave,” says Anuj Puri, Chairman of ANAROCK Group. “The quest for more space, one of the defining characteristics of luxury homes, fuels most of this demand, which has

helped developers to clear significant chunks of their unsold luxury stock. Data also reveals a 1 per cent decline in the overall unsold stock of luxury homes priced over Rs 2.5 crore across all top 7 cities; however, MMR saw a 24 per cent yearly decline in its unsold luxury stock. In fact, the current luxury stock of about 15,520 units is the lowest the city has held in this category in a long time.”

Overall, unsold inventory in the market surged 13 per cent during the period as buyers of affordable and mid-income homes stayed away from the market. Overall unsold housing stock across all budget categories in MMR saw a yearly rise from 177,560 units by Q1 2022-end to 200,540 units by Q1 2023-end. The luxury segment was the only segment to record decline in the period. Unsold stock of mid-segment homes (priced Rs 40–80 lakh) in MMR saw the highest rise of 33 per cent in the year from 40,245 units by Q1 2022-end to 53,550 units by Q1 2023-end.

While, MMR’s inventory of homes priced Rs 80 Lakh to Rs 1.5 crore rose by 23 per cent in the period from 43,140 units by Q1 2022-end to 53,080 units by Q1 2023-end. Inventory of homes priced between Rs 1.5 crore and Rs 2.5 crore saw a 7 per cent jump. The stock of affordable homes (priced less than Rs 40 lakh) jumped by 6 per cent from 50,860 units in Q1 2022 to 53,970 units in Q1 2023.