Sale of houses in the luxury segment (over Rs 5 crore in Mumbai, over Rs 2 crore in other cities) have been crashing as investors have made way for end users. In 2016, demonetisation sucked out liquidity, leaving developers as well as buyers of luxury properties high and dry. In FY2019, luxury segment sales declined 11 per cent to just 3,439 units (Liases Foras).
In contrast, every other house sold now is priced under Rs 50 lakh or in the affordable category. What has also led developers to move away from luxury properties is Section 80-IAB, which gives 100 per cent deduction on profits generated from affordable housing projects. Moreover, the PM Awas Yojana gives lower income households Rs 2.3 lakh upfront as subsidy for buying a home. Given these, any turnaround in the fortunes of luxury housing seems a distant dream now.