Luxury Homes – A Growing Preference for New Age Buyers
Despite the global economic and financial crisis, the Indian residential market is relatively stable in general, as demand for luxury housing grows gradually. This growing demand can be attributed to the rise in the number of high net worth individuals (HNWIs), the rapid pace of urbanisation, the influx of global lifestyle trends and an increase in the number of non-resident Indians (NRIs). Also, the recent fall in the value of rupee in global financial markets boosted buyers' interest in investing in luxury housing and encouraged developers to launch luxury/super luxury housing projects priced from INR 10-200 million.
The
fact that most buyers have been seeking quality products recently is compelling
developers to come up with luxury projects in collaboration with global
property developers and architects. To attract buyers, developers are now
trying out a variety of new products in the luxury housing segment, including
Singaporean and US-style apartments, homes that are similar to plush hotels and
branded luxury residences. Developers are also increasingly adding lifestyle
amenities such as golf greens, schools, hypermarts, jogging tracks, independent
swimming pools, complete home automation, modern clubs with exclusive members'
lounges, spas, Jacuzzis, concierge desks and gyms. Spacious luxury apartments
also invariably come with top-quality interiors, bathroom fittings and kitchen
decor, often featuring imported materials. Thus, the desirability index of
upcoming projects depends significantly on their lifestyle offerings and
exclusivity.
The difference
in cost between a mid-end/high-end apartment and a luxury apartment is not
much. Of course, this depends on location and varies from city to city, where
perhaps luxury residential projects have a higher risk and longer gestation
period compared to mid- end/high-end apartment projects.
The
total value of luxury homes, launched in 182 luxury residential apartments,
offering a total of 25,570 units across India's top seven cities of NCR-Delhi,
Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata in 2008-2012*, was
around USD 30 billion. NCR-Delhi, Mumbai, Bangalore and Chennai are leading in
terms of market share of these launches, with NCR-Delhi leading (at 44% of the
total), followed by Mumbai (21%), Bangalore (11%) and Chennai (10%). The Tier
II cities are at a nascent stage in luxury residential launches. In 2008-2012*,
Kolkata accounted for 7% of total luxury launches, followed by Pune (5%) and
Hyderabad (2%).
The
residential market is currently going through a phase of slow demand, although
growth for luxury housing looks moderate and demand is stable, giving buyers the
opportunity to negotiate. Over the short term, no price increases are expected,
despite the fact that the value of luxury homes is likely to increase
significantly over the medium-long term. The value of luxury homes will be
fuelled by presence of around 1.53 lakh HNWIs (whose numbers are growing at
fast rate), people who inherited wealth and have dynamic lifestyles, as well as
those in the newly rich segment (according to World Health Report 2010).
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