In the fast-growing housing market of India, where affordable residences for the economically underprivileged and opulent homes for the affluent take centre stage, attention is increasingly drawn to a crucial yet sometimes overlooked segment—the mid-segment homes.
This segment, catering to the housing needs of the burgeoning middle and upper-middle class, plays a pivotal role in aligning aspirations with the challenges posed by swift urbanization.
The mid-segment housing market in India, thus, holds promising mid-to-long-term growth prospects, supported by various factors and current data trends, according to industry experts.
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Anuj Puri, Chairman, ANAROCK Group, says, “India’s urbanization and population growth continue to drive demand for housing, particularly in the mid-segment category, as more people seek affordable yet quality homes in urban areas. The mid-range segment (homes priced between Rs 40 lakh and Rs 80 lakh) continued to dominate in Q3 2023 with a 28% share of the total new supply. This indicates the enduring strength of the segment, even as demand and supply of luxury housing also increases.”
Mohit Malhotra, Founder and CEO of NeoLiv, says, “The mid-housing segment serves as the largest and fastest-growing category as young and aspirational Indians are keen to enjoy global living standards with great product, exceptional post-possession services and joyful communities to live in.”
The surge in mid-housing demand is driven by India’s expanding middle class, characterized by a rising urban population with increased disposable incomes. Residents seek residences that offer modern amenities, connectivity, and community—a niche perfectly filled by the mid-housing sector.
According to Malhotra, the key challenges faced by the mid-housing sector are that developers need continuous access to funds and follow robust financial prudence practices. As cities expand rapidly, new hubs of sustainable mid-housing developments are becoming highly crucial. Well-planned projects ensuring timely delivery, transparent practices, higher usage of tech-led interfaces and long-term commitment mindset of new-age developers will re-ignite the joy of home ownership and living experiences in the future.
The India Real Estate-Residential and Office Market January-June 2023 report by property consultancy Knight Frank sheds light on this trend. According to the report, the share of mid-segment homes (priced between Rs 50 lakh and Rs 1 crore) has risen from 35 per cent in the first half of 2022 to 38 per cent in the same period this year. Moreover, the data highlights a record-high sale of mid-segment and premium homes since 2018.
Between January and June this year, 59,563 units of mid-segment and 47,130 units of premium homes were sold, compared to 54,913 and 40,306 units in the same period last year, respectively.
Sharing his insights, Shashank Vashishtha, Executive Director, Exp Realty India, says, “Amidst India’s dynamic real estate landscape, the surge observed in the mid-segment homes stands as an emblematic shift. From 2022 to 2023, this burgeoning segment witnessed a remarkable 3% increase in market share, a tangible reflection of urban homebuyers evolving preferences for modern, well-equipped living spaces.”
The significance of the mid-range housing extends beyond meeting immediate housing needs. It significantly contributes to overall economic growth by boosting construction, real estate, and associated industries, generating employment and stimulating economic activities. Furthermore, a robust mid-range housing contributes to the development of a socially diverse urban ecosystem, fostering inclusivity and a sense of belonging among residents.
Vashishtha adds, “The data from Knight Frank’s latest report not only underscores this market growth but also signifies a notable inclination towards a balanced lifestyle. This trend indicates a fusion of affordability with quality—a nuanced blend that is redefining the very fabric of housing preferences across the country. It’s a testament to the evolving aspirations of individuals seeking homes that harmonize convenience, comfort, and community—a trend that’s poised to shape the future of Indian urban living.”
As India confidently strides into a future shaped by urbanization and economic growth, the imperative focus on the mid-range housing segment becomes evident. By balancing accessibility and sustainability, this sector is a keystone in harmonizing the aspirations of a burgeoning populace. Policymakers and developers must ensure the housing landscape evolves in tandem with people’s aspirations, creating sustainable and inclusive communities for generations to come.