Luxury housing Demand Rises; Outlook Stays Bright
The return of normalcy has brought the buyer confidence back in the realty market, besides creating a demand for bigger homes. Having gone through a great upheaval during the peak pandemic months, the real estate industry is witnessing a surge in demand across segments, particularly in the high-end or luxury bracket; and the reasons for that are aplenty.
It is an established fact by now that the pandemic has instilled the need for owning a home among people, particularly in the young, millennial class which has so far been shying away from long-term investments. And the choice for this segment is largely the above-Rs. 1.5 crore properties. The trend can be seen all over the country with top execs and high-salaried individuals going for luxury housing. They are joined in this race by start-up owners, NRIs and major corporations. Further, various survey reports suggest that HNIs are also planning to buy properties in the coming months. All these factors paint a bright scenario for the luxury segment in the country.
Recent data released by research and analytic agencies not only speaks of a healthy uptick in the demand for luxury housing during the past months but also presents a robust outlook for the segment. According to a JLL report, residential sales in Q2 2022 (April-June) in the Rs. 1.5 crore plus price tag increased by over 270 per cent Year-on-Year (Y-o-Y). The two larger markets of Delhi NCR and Mumbai saw maximum sales in the quarter in this price bracket, said the report. Also, apartments priced above Rs. 1.5 crore had a share of 15 per cent in the quarterly sales in Q2 2022, added the report.
Although apartments in the price bracket between Rs. 50 lakh to Rs. 75 lakh had a larger share of 28 per cent in the residential sale during the quarter, the higher sales levels in the premium category is a reflection of increased demand for bigger homes and buyer confidence returning to the market, said the report further. Bengaluru and Pune recorded the majority of the respective city sales in this price category according to JLL’s Residential Market Update-Q2 2022.
A survey conducted by India Sotheby’s International Realty revealed that a large majority of the HNIs are proposing to buy property in the next two years reflecting a strong and decisive turnaround in the luxury real estate segment. Out of the 76 per cent who responded in the affirmative to buying real estate in 2022, 89 per cent said they would look to buy residential real estate vis-a-vis 11 per cent who opted for commercial real estate. This translates to 67 per cent of the respondents wanting to buy luxury homes, going forward.
The Sotheby’s survey elicited responses from over 200 HNIs and UHNIs to gauge the mood of the luxury homebuyer across India’s top eight cities-Delhi-NCR, Mumbai, Kolkata, Bengaluru, Hyderabad, Pune, Chennai, and Goa.
Apart from a lifestyle upgrade, luxury housing is seen as a lucrative investment opportunity and that’s attracted an increased number of buyers to this segment. said Yukti Nagpal, Director, Gulshan Group. She added the interest in real estate purchasing has seen a surge post-pandemic and the demand for bigger houses has led to the growth of the luxury segment. A highly positive development for the industry which was disrupted for nearly 2 years. We hope this momentum only continues to benefit the industry.
Sanjay Sharma, Director, SKA Group ascribed the demand for bigger homes with ultra-modern amenities partially to post-pandemic compulsions. “It’s not only about high-end amenities; people now prefer homes which provide them with space for a study room, workout area and other recreational activities. Long periods of confinement at home have also generated the need for owning a bigger home. All this bodes well for the future of luxury housing in the country,” he said.
“The NRI and new-age buyers have contributed immensely to the growth of luxury housing in the country during the past months,” said Amit Modi, Director, County Group. According to him, “Delhi-NCR market has seen flourishing of luxury real estate and within the NCR, Noida has become the top choice in this segment. The trend is no less manifest in the rest of the country as well.”
The positive data churned out by multiple research agencies, supported by the bullish sentiment expressed by top realty players, leaves no one in doubt that luxury housing is back in the reckoning. With things remaining smooth on the health front and economy growing steadily, the future of luxury housing is bright by all counts.