The Indian market has seen a significant surge in demand for luxury real estate that offers an unparalleled living experience. This growth can be attributed to a number of factors, including a rising number of high-net-worth individuals, urbanisation, and an increase in disposable incomes.
Furthermore, the pandemic has caused a shift in priorities for many individuals, leading to a heightened sense of the importance of home ownership. This, in turn, has resulted in a greater demand for larger residences that cater to the requirements of both work and education.
Despite rising property prices, the luxury real estate market in India has shown no signs of slowing down. In fact, the sector has continued to witness impressive growth, with Q1 of 2023 recording a significant increase in sales, particularly in the high-ticket segment priced at Rs1.5 crore.
This remarkable trend can be attributed to a number of reasons, including the government’s announcement in the Union Budget to cap capital gains at Rs10 crore, which came into effect from April 2023. This move is expected to encourage high-net-worth individuals to invest in luxury properties, leading to further growth in the sector.
It is clear that the demand for luxurious residences in India is at an all-time high, and the market shows no signs of slowing down. As more and more individuals seek unique and opulent living experiences, the luxury real estate market is poised for continued growth in the coming years.
Let us examine why luxury real estate has picked up in India in the past few years –
Shift in perspective
As the world navigates through the pandemic, it has brought about a significant shift in the way people perceive space. The demand for luxurious residences has surged as people spend more time at home and require more functional and comfortable living spaces. Developers have taken up the challenge to reimagine spaces and create a multi-functional living experience that exceeds buyers’ expectations.
The focus is on creating tailor-made luxury properties that offer comfort, safety, and security, with world-class amenities and spacious living spaces. The trend has shifted towards incorporating outdoor spaces in residential plans, making them more functional and comfortable. With the increased interest in sustainability and green living, developers are creating properties surrounded by greenery to offer a serene living experience.
In India, luxury property buyers are well-travelled and seek to integrate local elements and global inspirations into their bespoke living spaces. Developers are rising to the occasion and are designing properties that showcase a blend of various cultures, architecture, and accessories, offering a unique and personalized living experience.
The demand for luxury properties is on the rise, with at least 25% of the 1.14 lakh units sold in the top seven cities of India being high-ticket properties priced at Rs1.5 crore. Buyers seek larger-than-life living experiences and multi-functional spaces, and developers are reimagining spaces to cater to these changing preferences. With the Union Budget’s recent announcement to cap capital gains at Rs10 crore, this segment’s high sales could be attributed to the increased demand for luxury properties.
Rise of second homes
The allure of owning a bespoke second home has been steadily growing among those with the financial means. According to Luxury Realtor and Content Creator, Snehil Yadav ,a second home serves as a getaway and provides a much-needed escape from the hustle and bustle of city life.
The homestay model, which offers not only great capital appreciation but also consistent rental yields, has been a driving force behind this trend.
The appeal of luxury real estate in Pune, Goa and Alibaug is particularly high, with returns on investment being remarkably high, whether through property appreciation or regular rental income. Isprava Group has sold over 350 homes, worth more than $300 million, spread across various locations such as Goa, Alibaug, the Nilgiris, and Kasauli.
Location is key
Location, location, location – the golden rule of real estate. According to a survey conducted by India Sotheby’s International Realty, Delhi-NCR, Mumbai, Goa and Bengaluru remain the top choices for potential real estate buyers. Factors such as location, neighbourhood, amenities, connectivity and accessibility to business hubs play a significant role in property prices.
However, the luxury segment in Hyderabad and Pune is also expected to see a surge in the coming years, driven by the IT/ITeS sectors. With average residential prices ranging from Rs 4,800 per sq. ft. to Rs 6,150 per sq. ft., these cities are certainly worth keeping an eye on.
In addition, the pandemic has also resulted in a shift towards suburban living, as people look for larger homes with more outdoor space and less density. This trend is especially evident in cities like Mumbai and Delhi, where buyers are increasingly looking for properties in the outskirts and surrounding areas.
Developers have taken note of this trend and are focusing on creating luxury properties that offer both urban amenities and suburban living. Projects like Lodha Belmondo in Pune, Kalpataru Immensa in Thane, and Lodha Palava Lakeshore Greens in Dombivli are examples of such developments, which offer spacious homes with expansive outdoor spaces, all within a convenient distance from the city centre.
Overall, the real estate market in India continues to evolve and adapt to changing consumer preferences and market dynamics. As buyers become more discerning and demanding, developers are responding with innovative designs and amenities that offer unique living experiences, all while keeping location and connectivity in mind.
Rising Inflation
As the cost of construction materials continues to rise, the real estate market has become more competitive than ever before. Homebuyers looking to invest in property are faced with limited options, and developers are scrambling to keep up with the demand for high-quality homes that are both affordable and attractive.
Despite the inflationary trends, the real estate market remains resilient. Many experts predict that the market will continue to grow in the coming years, making it a smart investment opportunity for those looking to make a long-term commitment to real estate.
In addition, some developers are getting creative with their approach to offsetting the rising costs of raw materials. They are exploring new building materials, sustainable designs, and innovative construction methods that not only reduce costs but also enhance the overall value of the property. With these strategies in place, homebuyers can rest assured that they are investing in a property that not only meets their needs but also aligns with their values.
Long-term is back with luxury real estate
Real estate investments in India have evolved significantly over the past few years, and potential buyers need to be aware of the changing dynamics. According to industry experts, real estate investment is no longer a game of speculators looking to make quick profits. Instead, it has become a long-term game, with investors looking to earn decent returns on their investments over a period of 5-10 years.
Investors are also encouraged to look at properties that offer multi-functional spaces and an overall unique living experience. The pandemic has accelerated the demand for larger-than-life living experiences and outdoor spaces in residential plans, making living spaces more functional and comfortable.
Furthermore, developers are reimagining overall designs to integrate local elements and global inspirations into bespoke living spaces. Buyers with the financial wherewithal are also increasingly considering bespoke second homes as a home away from home, with locations like Goa and Alibaug seeing remarkable returns on investment in luxury real estate. In conclusion, the new catchword for real estate investment in India is “long-term”, with the potential for decent returns over time.
In conclusion, the Indian luxury real estate market has seen remarkable growth in the past few years, driven by a combination of factors such as a rise in high-net-worth individuals, urbanization, and increased disposable incomes. The ongoing pandemic has further fueled demand for larger and more functional living spaces, leading to a surge in sales in the luxury segment, particularly those priced at Rs 1.5 crore.
The shift in perspective has led to developers focusing on creating tailor-made luxury properties that offer comfort, safety, and security, with world-class amenities and spacious living spaces. The trend has shifted towards incorporating outdoor spaces in residential plans, making them more functional and comfortable, surrounded by greenery to offer a serene living experience.
With the Union Budget’s recent announcement to cap capital gains at Rs10 crore, the demand for luxury properties is expected to increase further. Location, neighbourhood, amenities, connectivity, and accessibility to business hubs play a significant role in property prices, with Delhi-NCR, Mumbai, Goa, and Bengaluru being the top choices for potential real estate buyers.
With developers adapting to changing consumer preferences and market dynamics, the real estate market in India is poised for continued growth in the coming years, offering unique living experiences.