LUXURY RESIDENTIAL MARKET’S GOLDEN RUN
Luxury housing sales in Mumbai (residential units worth over Rs 10 crore) and Pune (residential units worth over Rs 5 crore) were highest in 2021 in four years, according to a joint report by India Sotheby’s International Realty and CRE Matrix. Hyderabad displayed the highest demand for luxury (17%) and ultra-luxury (8%) segment homes priced above INR 2.5 Cr, as per Anarock study. Bengaluru alone contributed more than 30% of the total demand for luxury property units in Q4 2021 and Q1 2022 when compared with the top five cities of India, including MMR, Pune, Hyderabad, Gurugram and Noida, says Square Yards research. Delhi-NCR continues to be a hub for luxury homes. Of approx. 10,570 units launched in NCR in H1 2021, approx. 1,800 units were in the luxury and ultra-luxury segments priced >INR 1.5 Cr. Noida comprised maximum new luxury share (of 73%), followed by Gurugram with 22% share & Greater Noida with 5%, as per Anarock. While, sales in the high-end category jumped to 23% in Q1 2022 as against 16% in Q4 2022, those in the mid-end segment dropped to 41% in this quarter. The premium and luxury housing segments also witnessed a slight uptick in sales on a Q-o-Q basis. N ew unit launches jumped by nearly 30% Y-o-Y to cross the 60,000-unit mark in Q1 2022. With shares of 43% and 30%, mid-end and high-end categories dominated new launches in the country, according to the CBRE residential outlook report. WHY LUXURY REAL ESTATE IS TRENDING The luxury real estate segment witnessed an uptick last year, and it is expected that the trend will continue in 2022. Upgrading lifestyle has been the major factor that has propelled HNIs to opt for luxury homes with better amenities. Widely travelled HNIs and Millennial as well as NRIs are willing to spend on luxury real estate not only for the living but also investing purposes. What’s more, HNIs are buying second homes in holiday destinations with investment as an underlying motivation. Work-from-home opportunities have prompted many white collar workers and entrepreneurs to work from suburbs or tier II cities raising the buying potential for luxury properties in these markets. Around 31 per cent of HNIs believe it is an opportune moment to invest in the residential real estate segment as the sector is expected to resume price escalation. Thus, NCR, Mumbai Suburbs, Pune and holiday destinations like Goa are seeing growing interest of HNI homebuyers. According to some estimates, the premium segment (priced between Rs 80 lakh and Rs 1.5 Cr) acc ounted for 25% of total sales. WHAT ARE HNIS BUYING The luxury housing segment is witnessing a surge in the top eight cities, including Mumbai, Bengaluru, Delhi – NCR, Pune, Hyderabad, Chennai, Kolkata, and Ahmedabad and there has been a phenomenal jump in the demand for luxury properties in the Rs 10-25 crore range across these markets. The evolving definition of a home from being a shelter to providing a holistic lifestyle is driving the luxury property market across the country. While, in tier I cities luxury apartments are the being grabbed by the buyers, independent villas are finding favour in tier II and suburban locations. The trends that remains common are the preference for ready-to-move-in properties, a bespoke customized home, elite address and extra value amenities among the elite home-owners. Buying in the right neighbourhood is just as important as buying the right home. Apart from standard luxury amenities, there is also a rise in demand for business centres, convenience stores, home theatres, cloud kitchens, medical facilities within or connected to the projects. GLOBAL LUXURY HOME MARKETS The increase in demand and rise in prices across major hubs for luxury real estate were fuelled by many factors including low mortgage rates, shifts in lifestyle choices due to the pandemic and more flexible working patterns. Also, the digital democratization of investments, including private equity, have led to greater levels of wealth creation and growth across countries and these developments will gain momentum over the coming years. Dubai saw the biggest gain in luxury-home prices of any major global city in 2021 with a 44.4% increase in high-end sale prices, according to the annual Knight Frank Wealth Report. Moscow was in second place with a 42.4% annual change, mainly due to Russia’s mortgage subsidy program and tight supply. The next three spots were filled by U.S. cities of San Diego, California, with 28.3%, Miami with 28.2% and New York’s Hamptons with 21.3% increase in luxury home prices. Seoul (21%), Toronto (20.3%) and Taipei (18.9%) were next on the list, respectively. San Francisco was ninth pace with an 18.6% increase, followed by Los Angeles with 18.5%. The significant increase in wealth, as well as the population of the affluent individuals, combined with changing lifestyle patterns and dwelling preferences has led to a historic global luxury real estate market expansion. In 2021, sales of single-family luxury homes, defined as the top 10% of any given market, rose 14.5% while prices increased 20.3% from 2020, as per Coldwell Banker Real Estate LLC. ONE OF THE SILVER LININGS OF THE PANDEMIC HAS BEEN AN INCREASED AWARENESS OF THE IMPORTANCE OF SUSTAINABLE LIVING. SMART AND SUSTAINABLE HOMES HAVE BEEN THE TOP PRIORITIES OF THE WEALTHY HOME BUYERS ACROSS THE WORLD. DEVELOPERS WORLDWIDE TOO ARE NOW PROVIDING SUSTAINABLE LUXURY HOMES IN BEAUTIFUL LOCATIONS FOR THE UBER-WEALTHY, BE IT A PRIMARY OR A VACATION HOME. ALSO, WITNESSED IN THE GLOBAL LUXURY PROPERTY MARKET IS THE INCREASE IN DEMAND FOR HOMES THAT ARE NOT MERELY AWAY FROM THE HUSTLE AND BUSTLE, BUT ACT AS AUTHENTIC RETREATS.
Tags : LUXURY RESIDENTIAL MARKET GOLDEN RUN Mumbai Bengaluru Delhi – NCR Pune Hyderabad Chennai Kolkata Ahmedabad Square Yards research India Sotheby’s International Realty CRE Matrix HNIs Knight Frank Wealth report