We all know how the pandemic brought about demand for bigger homes with better quality of life and more amenities. The ultra-luxury and luxury real estate segments were already seeing decent traction over the last few months. The trend is now continuing. Here’s looking at the key factors behind the same.
The COVID-19 pandemic and luxury/ultra-luxury real estate are unlikely bedfellows. Strange even. However, prevalent market trends are playing out in unique ways in the Indian realty space. To put it straight, the real estate industry has recovered as whole, sales figures are picking up and new launches are maintaining their new-found momentum. Yet, there has been widespread recovery in the luxury and ultra-luxury segments which has surprised even market pundits considerably.
Several reports state that supply and sales of luxury units have both increased to record levels in three years as per the findings in the first quarter of 2022. Prices have largely remained stable while interest rates have been more attractive for investors as per industry watchers. Many reports vouch for luxury homes contributing 12% of total home sales figures for the period, entering comfortably into double digits this year. India’s top 7 cities saw launches of 13,000+ new housing units in this period as well.
In fact, the trends are clearly visible throughout the market spectrum. DLF Limited has already reported Rs. 1,500 crore in sales from phase one of its eagerly awaited luxury residential venture in the National Capital, called ONE Midtown. High net worth buyers are clearly seeking bigger and even more spacious homes to accommodate workplaces, offices, study areas and open spaces and even private lawns and green nooks as per industry players. Many are looking for more entertainment and recreational facilities along with amenities like swimming pools and gymnasiums alongside.
Luxury Real Estate Makes its Presence Felt in Mumbai
The country’s costliest city saw luxury real estate booming again like never before. Sales volumes have more than doubled in 2021 for properties with sticker prices exceeding Rs. 10 crore. Rs. 20,255 crore worth of homes were sold owing to higher demand. Luxury housing properties notched up Rs. 9,492 in luxury property sales and 1,214units found buyers. The biggest markets were Bandra, Lower Parel, Worli, Prabhadevi, Tardeo and Andheri. Worli comprised 20% of the luxury segment in the city as per reports. 2/3rds were fresh unit sales while the others were resale transactions.
Luxury home buyers have responded positively to the stamp duty cut offered by the Government of Maharashtra and other incentives given by real estate developers. Prices of these units have mostly remained stable over the last few years and buyers are now picking up suitably priced real estate units for future wealth and stability. Rs. 16 crore was the average price paid for a luxury unit in Mumbai at this time as per reports. Andheri West has also emerged as one of the biggest luxury property markets in the country in this period. The first quarter of 2022 also saw Mumbai notching up 306 luxury unit sales with a value of Rs. 4,877 crore as per estimates.
Luxury All The Way
In fact, it is not just Mumbai alone; big-ticket transactions are being seen in parts of New Delhi, Gurgaon and even Goa as per reports. The trends augur well for the luxury and ultra-luxury property markets with the momentum expected to continue as per experts. HNWIs, UHNWIs and NRIs should keep the luxury segment ticking as they keep building their property portfolios for the future. There is a new segment of luxury home buyers as well, considering successful start-up founders and self-made entrepreneurs. With the country already possessing 100 unicorns and more, there is a new first-generation wealthy buyer who is entering the market in large numbers.
With more people gaining huge money from stake sales and equity dilution, the same is being invested in the real estate market. Developers are counting on these trends to come up with newer launches in the category with smart home features, automation and high-end service offerings in line with top hotels. At the same time, the market for luxury properties is still somewhat tiny in the country as compared to the United States for example, but does have parallels with Dubai, New York and other such global cities. Urban lifestyles are fast transforming in the country and more buyers are preferring hybrid spaces with more space and better quality of life. People are also buying properties on two floors or next to each other in order to live with their parents and siblings, or even their children
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The luxury space has been under fire over the last many years. However, it has finally found its sweet spot as it seems. With a rapidly growing super-rich count across the country and sustained interest from NRI buyers, the momentum should continue well into the next few quarters as per estimates.
