In conservative terms, luxury and affordability are considered dichotomous. However, in the modern context, both these terms have found convergence in a number of ways.
Luxury is commonly associated with “Exclusivity”. Such exclusive brands do not believe in open display of their products instead prefer the whispers of the “cognoscenti” or the premium clientele. This is the “By invitation only” clientele who are also the best ambassadors for the luxury brands.
Globalisation, increase in job opportunities and double-income earning families have led to a spurt in spending capacity in the average Indian household. The so-called “new-money” has always been an enabler for a spurt in disposable income leading to increased spending on homes, vehicles, food, dining, travelling and education of children in International/Global Schools.
Today an aspirational young generation with increased disposable income is investing in “Luxury” goods and services with social media and traditional media aiding in the awareness of the products in the luxury sector. What was once the basic requisite of Indian household in terms of Roti, Kapda aur Makaan, has now transformed into Pizza, Prada and Penthouses (Luxury homes).
Previously considered as high-end luxury brands like Armani, Michael Kors, Versace, Chanel, Loui Vuitton & Gucci etc. are now finding buyers well beyond the so-called affluent class. High end star hotels, these days, are well within the means of the so called middle income group and are no more considered unaffordable. Similarly, in the vehicle-industry, a new breed of consumers are opting for mid- level versions of international luxury brands instead of home grown high end cars.
These consumers who can be called “Mass Luxury Consumers” signal a growth impetus for industry across the sectors. In the housing sector, this new rich group of consumers, who are in the 40-45 years age group and are highly aspirational, want to own of luxury condominiums of 3,3.5 & 4 BR depending upon the cities and location with a price band of Rs. 2.5 – 4 cr. These customers expect all amenities that enable
Ease of Living along with status symbol of living in a posh luxury apartment.
Keeping in mind such aspirations of buyers real-estate companies are following international trends in architecture, building technology, space design, management and sustainability and green practices. In this era of climate change, realtors and house buyers have realised the importance of clean and sustainable living and hence real estate companies are adopting all practices that combine comfort and sustainability.
Hence product – pricing plays an important role in the decision making of the new-rich ambitious consumer. Through a balanced product-pricing, the real estate companies are able to cater to a broader segment which includes HNI’s, upper middle class and the new-rich middle class.
The banking sector plays an important role in this new scenario by offering greater purchasing power through easy loan schemes. The real estate companies have, therefore, shifted their focus to customised homes as per the desire and requirements of the buyers.