Real estate industry experts feel that entering early into emerging locations may fetch stellar returns in the future. The market has evolved tremendously ever since the outbreak of the COVID-19 pandemic. The luxury realty segment, which had been muted for several years, is finally witnessing stronger demand in the last few months.
Location matters more than anything else in this segment. Co-Founder and Head of NRI Sales, Square Yards, Anupam Rastogi, has stated that a prime location is the biggest aspect that truly defines luxury. He has added that coveted zip codes are the biggest plus point along with privacy, gorgeous views, seclusion, premium interiors and architecture that harnesses global trends are major aspects that contribute towards defining luxury. Price benchmarks for luxury realty naturally differ across cities. In Mumbai, for instance, a luxury project may be called as one which is priced at Rs. 75,000 and more per square feet while this threshold will be higher than Rs. 45,000 per square feet in Delhi and Rs. 35,000 per square feet in Chennai, Bengaluru and Kolkata along with Rs. 30,000 per square feet in Hyderabad and Pune.
Mumbai has the highest luxury projects in its kitty and there is steady growth in this segment. The South and Central Mumbai markets were in a state of slump over the last few years. However, they are seeing higher traction now. Demand is increasing in new destinations including Tier-II cities such as Hyderabad, Surat, Chandigarh, Jaipur and Kochi as per experts. Demand is also rising for townhouses and villas along with apartments.
Experts feel that buyers in this segment have witnessed a comparatively lower impact on account of the COVID-19 pandemic. Lowering stamp duty rates was another positive move by the State Government of Maharashtra, ensuring higher savings for buyers and a bigger incentive to purchase properties. Anupam Rastogi has also opined that affluent and well-heeled buyers now prefer living in more secluded surroundings post the coronavirus pandemic. He stated that there is a strong desire towards healthy living and this is prompting several high-net worth individuals (HNIs) to choose second homes.
He added that the present upswing in demand is expected to continue at the moment. Rastogi also stated that the luxury real estate segment has always been a wiser and safer investment over the long haul, irrespective of whether it caters to personal usage needs or is rented out or kept for resale value appreciation. These are extremely high-value assets which have the best scope of price appreciation according to him. Some experts feel that gradually evolving micro markets, especially in Tier-II cities, would make for good investment decisions in the future.
Rastogi also opined that buyers should take the help and guidance of an expert before making such a big-ticket investment, unless they possess ample knowledge about the segment and industry. He recommended finding a local expert who knows price trends and new developments within any particular micro market. He also suggested that due diligence should be carried out on all hidden costs which may lead to an unnecessary uptick in pricing. Comprehensive studies should be implemented on aspects like project density, location, on-demand amenities and other security features. The reputation of the real estate developer should be carefully assessed as well.
Some experts also feel that buyers should opt for properties which are ready units and if they are under construction, should be from a highly reputed real estate developer with a good track record in terms of project delivery. It goes without saying that all such projects should have RERA registration as well.
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Published Date: Aug 28, 2021
