With the return to normal economic activity, the luxury real estate market has made a strong comeback. In fact, homes are no longer about the bricks and mortar they once were, but about the overall living experience. This sentiment appears to be the most influential factor in the growing demand for larger homes with high-end amenities. In the first half of 2022, the demand for smart luxury homes with high-tech and artificial intelligence (AI) monitoring features such as automatic temperature, light and voice control almost doubled. According to a recent report, 14% of the 184,000 units sold in India’s seven major cities during the period were luxury homes.
One of the biggest trends this year has been the influx of demand for homes in the luxury and ultra-luxury segments. In India, while there has always been an appetite for residential real estate, people have also favored other asset classes. Since the start of the pandemic, there has been an increased shift towards investing in real estate and residential. The recent increase in demand in the luxury segment demonstrates a resilient consumer mindset that emphasizes the experiential side of life. This is true not only for real estate but also for luxury purchases in other categories. Consumers have become more demanding and their expectations of a luxury home have been redefined due to global exposure. Developers are increasingly innovative in their offers to meet consumer expectations.
Apart from an improvement in lifestyle, luxury housing is seen as a profitable investment opportunity, which has attracted an increasing number of buyers to this segment. The value of a luxury home appreciates over time and it also offers a good rental opportunity to the investor. HNIs and NRIs make significant investments in luxury housing to maximize returns and, in some cases, to plan for the future. The inherent need, following the pandemic, to own a home where one can hope to lead a retired life with all amenities within the premises and accessibility to major social facilities nearby can also be attributed to the demand for luxury accommodations. Much of this demand generation can be attributed to large HNI communities, growing awareness of international design and aesthetics, and lifestyles heavily influenced by global cultural influences. Not to mention the location effect.
In cities like Mumbai, ultra-premium residences in prime locations have caught the eye of celebrities and business moguls. Bids of several crores and high prices per square foot made headlines, illustrating the growing demand for luxury homes.
High-tech digital advances
Advanced technology is changing strategy and improving the global economy, and it has also impacted the real estate industry. Today’s generation of home buyers define luxury real estate as reflecting their standard of living, with high-end amenities and the latest smart technologies and engineering concepts for maximum end-user comfort. Developers compete to outdo each other with luxurious amenities like concierge, home automation, smart interiors, outdoor terraces, temperature-controlled pools, and even Olympic-level sports facilities.
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In recent years, the Indian real estate sector has improved its image to become a customer-centric or buyer-first market. This has been made possible in large part by much-needed political support and initiatives such as RERA, which have made the market more transparent, credible and profitable. The falling rupee and volatility in the stock market has also prompted NRIs and investors to invest in luxury homes.
Finally, luxury homes are about living standards. With rising consumer expectations, developers are increasingly offering world-class amenities and international building standards. NRI and new-age buyers have also contributed significantly to the growth of luxury housing in the country in recent months. Data from multiple research agencies, combined with bullish sentiment expressed by top real estate players, leaves no doubt that luxury housing is back in the game. With health care costs stable and In a steadily growing economy, the future of luxury accommodation looks bright on all fronts.
(By Ram Raheja, Managing Director of S Raheja Realty)