The increased exposure to global standards of living has drastically changed the way the Indian customer views luxury living. With the increase in per capita income in urban spaces, the demand for luxury living spaces is also witnessing a noted increase. These homes tend to be in the plush locations of the city and attract the crème de la crème of society.
The expectations regarding luxury differ from person to person. With the increasing options in the luxury segment, the demands of the buyers are growing fast. Apart from exploring new locations, rooftops, advanced technological and security innovations, waste management, water utilisation, eco-friendly features, unique designs, dedicated dressing rooms, imported and hand painted art collections, exclusive libraries, community spaces like clubs, swimming pools, closed basketball courts and golf courses, the luxury segment is continuously evolving to reinvent itself. Due to the intense competition in the market, builders are trying to provide numerous luxury amenities and options to their customers.
Strategically angled windowpanes, innovative designs, and architecture are being adopted by the builders. Efficient ventilation systems and innovative construction materials are being used to make buildings more sustainable and energy efficient. Apart from that, the luxury segment apartments must be located in the city-centre with good communication links to the airport and office areas. People who buy luxury apartments usually look for a gated community. Dr. Debkishore Gupta, a resident of Urbana, a luxury residential complex, situated in Kolkata, told BE, “The external appearance of the skyscrapers were captivating and it was an instant decision for us. The expansive views from higher stories and the large manicured greens brought us back to the nature and it was so refreshing. A residential club with all modern amenities and a huge car park were the added perks.”
A large segment of buyers in the luxury segment are looking for investment options. The market is dominated by business-persons, upper scale IT professionals and non-resident Indians (NRIs). Some metro cities in India are witnessing a larger growth in this segment as compared to other metropolitan cities. New Delhi and Mumbai are two metropolitan cities that are experiencing good growth in the luxury segment. Bengaluru is also doing well. Certain regions of Kolkata have also seen decent growth in the luxury segment.
Market of the luxury segment
Market analysts are claiming that this segment is not doing as well as the affordable segment. However, the market is quite expansive. India has the fourth largest population of millionaires with around 2.36 lakh individuals who fall firmly in the High Net worth Individuals (HNIs) category. In the list of the ‛World’s Billionaires’ for 2017, India ensures its status at 101.
However, this market size cannot be compared to the sheer size of the affordable segment. Any comparison between these two segments in India will fail to portray the real picture as the respective sizes of these two segments are so starkly different. It might seem that that luxury segment is not growing at the pace of the affordable segment. However, if compared to the performance of this segment in earlier fiscals, it can be noticed that the luxury segment is witnessing significant growth in many of the metropolitan cities in India.
Noting the present market trends, it seems that the Indian luxury housing developers had over-estimated the demand for their offerings. At the same time, it must be noted that most of these builders, investors and developers are seasoned long-term players with their sights trained not only on the current market but also on the future demands. The buyers of modern luxury homes tend to be professionally active, as the demand for luxury housing in India is closely wired to the country's economic performance.
Anuj Puri, Chairman, ANAROCK Property Consultants, informed BE, “Today luxury housing in India is still very much work in progress, but the segment has made giant strides in transforming and keeping pace with the rising expectations of the well-heeled and well-travelled in terms of global standards of luxury and comfort. Also, with every passing year, more Indians are joining the ranks of the wealthy and are automatically being inducted in the market for luxury homes. The real estate market has now recovered from the demonetisation shock and in fact looks primed for a rebound on the back of the transparency and regulated market practices that The Real Estate (Regulation and Development) Act (RERA) is likely
to bring in its wake.”
Previously, The International Monetary Fund (IMF) had cut India’s GDP growth forecast to 6.6% in January 2017, immediately after the demonetisation move. Things are looking up for some time now. In April, it revised its outlook for 2017-2018 to 7.2%. Keeping this estimation in mind, the luxury segment of the real estate sector can be expected to bounce back.