With the return of 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 rising demand for larger homes with high-end amenities. In the first half of 2022, demand for smart luxury homes with high-tech surveillance and artificial intelligence (AI)-based features such as automatic temperature, light, and voice control nearly doubled. As per a recent report, 14% of 184,000 units sold in the top seven Indian cities in the period were luxury homes.
One of the most significant trends this year has been the influx of demand for homes in luxury and uber luxury segments. In India, while there has always been an appetite for residential property, people have also preferred other asset classes. Since the onset of the pandemic, there has been an increased shift towards investment in real estate and residential. The recent surge in demand in the luxury segment demonstrates a resilient consumer mindset that emphasizes the experiential aspect of life. This is true not only for real estate but also for luxury purchases in other categories. Consumers have become more discerning, and their expectations of a luxury home have been redefined as a result of global exposure. Developers are being more innovative in terms of their offerings to meet consumer expectations.
Aside from a lifestyle upgrade, luxury housing is viewed as a profitable investment opportunity, which has drawn 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 are making 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 look forward to leading a retired life with all amenities within the premises and accessibility to great social infrastructure nearby can also be attributed to the demand for luxury housing. A large part of this demand generation can be attributed to large HNI communities, growing awareness of international design & aesthetics, and lifestyles directed heavily by global cultural influences. Not to mention the effect of location.
In cities like Mumbai, ultra-premium residences in prime locations have gained the attention of celebrities and business tycoons. Multi crore deals and high per square feet prices have been in the news showcasing rising demand for luxury homes.
Hi-Tech digital advancements
Advance technology is changing strategy and improving the global economy, and it has had an impact on the real estate industry as well. Today’s generation of home buyers defines luxury real estate to reflect their standard of living, with top-of-the-line amenities and the latest smart technology and engineering concepts for maximum end-user comfort. Developers are competing to outdo one another with luxurious amenities such as concierge, home automation, smart interiors, outdoor decks, temperature-controlled pools, and even Olympic-level sporting facilities.
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In recent years, India’s 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 policy support and initiatives such as RERA, which have made the market more transparent, credible, and profitable. The falling rupee and volatile stock market have also enticed NRIs and investors to invest in luxury homes.
Finally, luxury homes are about the standard of living. With rising consumer expectations, developers are increasingly providing world-class amenities and international construction standards. NRI and new-age buyers have also contributed significantly to the country’s luxury housing growth in recent months. Multiple research agencies’ data, combined with the bullish sentiment expressed by top real estate players, leaves no doubt that luxury housing is back in the game. With health-care costs remaining stable and the economy expanding steadily, the future of luxury housing looks promising on all fronts.
(By Ram Raheja, Managing Director at S Raheja Realty)