Luxury homes the new realty in India: Sales surge 97% in nine months

Delhi-NCR, Mumbai, Hyderabad among 7 cities to emerge as hotspots in Jan-Sep

The luxury housing segment sales in India have surged after the pandemic as more people opt for larger spaces with mod-cons, including dedicated rooms for working from home. The trend is expected to continue, especially among non-resident Indians (NRIs) and certain categories of millennials with high disposable income.
 

Seven cities — Delhi-National Capital Region (NCR), Mumbai, Pune, Hyderabad, Bengaluru, Chennai, and Kolkata — have emerged as luxury housing sales hotspots.
 

In India, sales of luxury housing priced at Rs 4 crore and above jumped 97 per cent year-on-year during January–September 2023, according to the latest CBRE report.
 

Total sales of luxury units during the nine months of this year stood at approximately 9,200, compared to 4,700 units during the same period last year.
 

Among the leading cities, Delhi-NCR, Mumbai, and Hyderabad emerged as the top three markets dominating sales, cumulatively accounting for nearly 90 per cent of the total luxury housing sales across the top seven cities.
 

Delhi-NCR topped the list with a share of about 37 per cent. This was followed by Mumbai, Hyderabad, and Pune, accounting for approximately 35 per cent, 18 per cent, and 4 per cent, respectively.
 

A recent Anarock Consumer survey revealed that during pre-Covid (first half of 2019), only 9 per cent of the respondents preferred to buy luxury homes priced at more than Rs 1.5 crore, while in its most recent survey (first half of 2023), as many as 16 per cent of respondents preferred to buy luxury homes.
 

“In the aftermath of the pandemic, we saw homebuyers preferring bigger homes amid work-from-home and e-schooling realities, and this trend continues to date even when life has returned to normal. And one of the key features of luxury homes is their size,” said Santhosh Kumar, vice-chairman of Anarock Group.
 

“Moreover, there was minimal impact of the pandemic on the luxury homebuyer class, who are out in the market for various reasons. Discounts and multiple offers doled out by developers initially during the pandemic further made such properties far more lucrative and attractive for several buyers. It also scores high with NRIs due to the depreciating rupee translating into greater purchasing power,” he added.
 

Mumbai-headquartered Hiranandani Group believes that after the pandemic, homebuyers are inclined towards more spacious homes with well-embedded amenities and better utilitarian value. The company has been witnessing an uptick in demand and incremental sales value in the luxury housing segment.
 

“Since the market is very conducive to real estate, we are bullish on the sustainability of demand for mid and luxury housing. The banks and foreign institutional investors are also optimistic about home loan credits due to stabilising interest rates and the fact that the buyer segment has broadened due to feasibility,” said Niranjan Hiranandani, managing director, Hiranandani Group.
 

“Furthermore, NRIs are investing across key property markets in branded one- and two-bedroom homes through the facilitation of a conducive market ecosystem,” he added.
 

In light of the positive trajectory in the luxury housing segment, Hiranandani Group expects the segment to grow at a compound annual growth rate of 10 per cent for the calendar year 2024, Hiranandani said.
 

The increase in sales is on the back of a growing economy and an increase in aspiration levels, leading to elevated lifestyle investments being made by affluent consumers, according to Anshuman Magazine, chairman and chief executive officer (CEO), India, Southeast Asia, Middle East, and Africa, CBRE.
 

“The luxury segment stands out as an attractive investment avenue for high-net-worth individuals and NRIs seeking stability amid global economic uncertainties. The pause in the interest-rate cycle, incentives, and schemes offered by developers during the festival season has further bolstered sales,” he said.
 

Real estate consulting firm Property First points out an interesting trend where the overall age bracket of buyers considering luxury homes has come down considerably.
 

“People over 35 years of age are known to be purchasing luxury homes these days, and for them, going from Rs 3.5 crore to Rs 4 crore has become extremely typical. The new generation of buyers, who are the millennials and GenZs, are savvy, well-informed, have money at their disposal, and most importantly, are adept at planning their future. They understand that investing early has its benefits, and they prefer luxury properties as their preferred choice of investment. The takers of luxury properties consist of startup founders, CXO-level professionals, and NRIs from West Asian countries,” said Bhavesh Kothari, founder and CEO, Property First.
 

Luxury housing seems poised to remain a lasting trend, driven by a growing inclination among individuals to invest more in their ultimate living spaces. The desire to upgrade to larger homes with increased carpet area and premium features is becoming a defining aspect of contemporary home preferences.
 

“It is estimated that both sales and new launches in the residential sector could reach a 10-year high in 2023 and may exceed the 300,000-unit mark,” said Magazine of CBRE.