The Indian realty market continues to be driven by high-ticket size property deals. The buyers are mostly business tycoons, ultra-wealthy individuals and start-up founders. This spells good news for the ultra-luxury and luxury property segments.
As we have observed in the past, demand for luxury real estate continues unabated. Luxury and ultra-luxury residences are finding more takers amongst India’s wealthy businessmen, start-up founders, and corporates. There are several categories of buyers including founders at leading start-ups which have achieved record success, leading corporate CEOs and even well-known business families as per reports. They have been shelling out anywhere around Rs. 50 crore to Rs. 1,000 crore for buying homes over the last few months.
Luxury housing sales touched record levels in both Pune and Mumbai last year and 2022 may see new benchmarks being established. 1,241 luxury residential units were sold last year in Mumbai and they were valued at around Rs. 20,255 crore. Compare these figures with 598 units sold in 2018 for Rs. 9,872 crore and you get the picture.
Notable Buyers Enter the Luxury Realty Market
Some of the big realty buyers in recent times include business tycoon Shekhar Bajaj and family along with vice-chairman at Bharti Enterprises, Rajan Bharti Mittal, INOX’s Siddharth Jain, Shailesh Dalmia and wife Natasha, PharmEasy founder Siddharth Shah, retail giant and stock-broker Radhakishan Damani, former HDFC Bank MD Aditya Puri’s daughter Amrita Puri and wife Anita Puri, and Pooja Dhoot, wife of the Videocon Group honcho Anirudh Dhoot. Even Tata Sons Chairman N Chandrasekaran has invested with family along with JC Chaudhary, the founder at Aakash Educational Services.
Experts feel that big business families are either selling off jointly owned mansions and bungalows at prime locations and this is leading to supply increasing for such homes throughout Delhi and other metros. These are majorly owned by elderly members of the family or several next-generation family members. A big chunk of such real estate, especially units valued at more than Rs. 25 crore, has entered the market after the COVID-19 pandemic. The original owners are sometimes not alive currently and the next generation is looking at selling off property that is jointly inherited. They also opine that with more uncertainty coming into the lives of many people, families, particularly elderly citizens, are more inclined towards distributing assets towards their heirs within their lifetime. Such properties are usually situated at Mumbai, Alibaug, Goa and prime areas in Delhi like Golf Links, Sunder Nagar and Jor Bagh among others.
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Some Other Trends Worth Noting
Close to 25% of HNWIs purchased real estate at the time of the pandemic. Around 2/3rds of such buyers were looking to purchase a home anytime soon this year as per reports. There is soaring demand for luxury bungalows in prime localities in metro cities and even farmhouses in well-known suburban zones. Demand is coming from businessmen, corporate honchos and founders of startups who have done well in recent times. The luxury housing spike has extended into April and May after a strong show in the quarter ending in March, 2022.
Several buyers are now investing more in luxury homes, often at the expense of other luxury purchases as per some experts. For instance, DLF has already sold Rs. 580 crore worth of units at The Camellias project at Gurgaon. These were only 19 units and they were sold in the final quarter of 2021. This ultra-luxury project saw 53 more units being sold in the second and third quarters of FY2021-22 for Rs. 1,617 crore. Ultra-luxury projects offer like-minded communities, great amenities and other comforts for the whole family as far as these buyers are concerned. They are well-travelled and socially linked with those staying in foreign countries. They look for the best options back home in India as a result.
The luxury housing space did really well in 2021 for Mumbai as per reports. This is in sync with increasing appetite for luxury homes throughout other major cities like Dubai, London and New York. It could spell new beginnings for an increasingly optimistic Indian luxury realty segment. Mumbai saw Rs. 9,492 crore worth of luxury properties selling out in 2021. 1,214 units were snapped up in Maximum City. The stamp duty cut and other discounts played a major role in stimulating demand according to industry watchers. Pune also benefited equally with 208 units selling out for Rs. 1,407 crore last year. Buyers are also encouraged by the fact that home prices have remained mostly unchanged over a period of 5-6 years in almost all categories. HNWIs are taking advantage to buy luxury assets before prices go up as per experts. Of course, the pandemic gave these people a chance to re-evaluate their real estate assets and spurred them to opt for larger homes and even better living experiences. The sales momentum should stay positive in 2022 as per reports, with 306 luxury housing units already finding takers in the last quarter in Mumbai alone. These were worth a staggering Rs. 4,877 crore. The luxury and ultra-luxury segments could drive Indian real estate towards a new era of prosperity and progress after the setbacks of the last decade.
