Affordable housing segment faces 43 pc YoY decline in sales amid rising borrowing costs: Report

New Delhi [India], January 13 (ANI): The affordable housing segment (<Rs 5 million) continued to face challenges as sales in this category fell by 43 per cent YoY to 4,223 units in 2024, hindered by rising borrowing costs and higher equated monthly installment (EMI) burdens, according to Knight Frank report.

Similarly, the Rs 5-10 million segment saw a 45 per cent YoY decline, with sales dropping to 7,510 units. These figures highlight a growing shift in the market towards premium and luxury housing.

Residential prices in NCR have also shown steady appreciation. The average price rose by 6 per cent YoY to RS 5,066/sq ft/month.

Notable areas such as NH-24 Bypass in Ghaziabad, Sector 81 in Gurugram, and Sector 78 in Noida experienced a 6 per cent YoY increase, while other micro-markets like Dwarka in Delhi and Raj Nagar Extension in Ghaziabad saw price growth of 6 per cent and 5 per cent, respectively.

Properties priced above Rs 10 million accounted for 80 per cent of the total residential units sold in the National Capital Region (NCR) in 2024.

This underscores a shift toward premium housing, with affluent buyers driving demand for spacious homes equipped with modern amenities in prime locations.

Among the high-value segments, the Rs 10-20 million category recorded the highest sales volume, with 19,111 units sold, contributing over 33 per cent of NCR’s residential sales. This was followed closely by the Rs 20-50 million category, where NCR led the sales across eight major markets in India, registering 18,997 units–an 84 per cent year-on-year (YoY) growth.

Mudassir Zaidi, Executive Director – North, Knight Frank India, highlighted this trend, stating, “Homebuyers’ preference for residential products priced upwards of RS 10 mn continued to remain strong as spacious homes with high-end amenities are redefining post-pandemic living by high-net-worth individuals. Gurugram and key locations of Noida and Greater Noida continue to draw a substantial interest amongst homebuyers in the higher ticket size segment.”

The premiumization of NCR’s residential market extended to other high-ticket categories as well. Sales in the Rs 50-100 million bracket grew 35 per cent YoY, from 5,469 units in 2023 to 7,361 units in 2024.

Similarly, the RS 100-200 million segment witnessed a 44 per cent YoY rise, with sales increasing from 275 units in 2023 to 397 units in 2024.

Even the ultra-luxury category, with properties priced above Rs 500 million, saw a sharp rise in sales, growing from 6 units in 2023 to 49 units in 2024. NCR accounted for 33 per cent of the national sales in this segment.