Despite growing housing costs, the luxury real estate sector appears to be thriving—at least in Mumbai, the country’s largest real estate market.

According to the most recent statistics from market analyst firm Anarock, increasing demand for luxury residences in the Mumbai Metro Region (MMR) has resulted in a significant decrease in unsold inventories of such homes during the March quarter.

According to Anarock Research, the number of unsold residences priced above Rs 2.5 crore fell 24% year on year in Q1 2023, from 20,480 units to 15,520. MMR’s luxury stock was around 23,130 units in pre-Covid Q1 2019.

“Since the first Covid-19 wave, luxury homes have been driving housing sales across most cities,” says Anuj Puri, Chairman of ANAROCK Group. Data also shows a 1% reduction in the overall unsold stock of luxury properties priced over Rs 2.5 crore across all top 7 cities; however, MMR had a 24% yearly decline in its unsold luxury stock. The city’s current luxury supply of roughly 15,520 units is the lowest in a long time.

Overall, unsold inventory in the market increased by 13% during the period as purchasers of low- and middle-income properties avoided the market. Overall unsold housing stock in MMR increased yearly, from 177,560 units at the end of Q1 2022 to 200,540 units at the end of Q1 2023. The luxury segment was the only one to experience a decline during the period. Unsold stock of mid-segment homes (priced Rs 40-80 lakh) in MMR increased by 33% year on year, from 40,245 units at the end of Q1 2022 to 53,550 units at the end of Q1 2023.

MMR’s inventory of residences priced between Rs 80 lakh and Rs 1.5 crore increased by 23% from 43,140 units at the end of Q1 2022 to 53,080 units at the end of Q1 2023. Inventory of properties priced between Rs 1.5 crore and Rs 2.5 crore increased by 7%. The supply of affordable dwellings (those priced under Rs 40 lakh) increased by 6%, from 50,860 units in Q1 2022 to 53,970 units in Q1 2023.