Indian real estate market have premium housing on fast track in previous year, despite of slow down in property market in India. The market for middle-income and affordable housing may currently be facing some stagnation or going through a phase of slowdown, but that is hardly the case with the premium housing segment. In fact, driven by the fast pace of urbanization, higher disposable incomes, new offerings and greater influx of NRIs, the luxury and ultra luxury housing segments — with unit prices ranging between Rs 1 crore and Rs 30 crore — have not only evolved significantly over the past few years in India, but are also expected to grow handsomely in the near future at least.
Despite of slowdown, the Indian real estate market has seen an increase in the demand for luxury housing and it is clearly emerging as one of the most vibrant and dynamic real estate segments in India. It can be said that there is a substantial and sustainable market for this segment and the positive response to some recent luxury projects launched by developers in Mumbai, Delhi-NCR and Bangalore bear testimony to this.
In fact, spurred by lifestyle aspirations and matching earning capacities, salaried as well as business class are opting for luxury housing in a big way. No wonder while the realty sector in general is currently going through a challenging phase, the Indian luxury real estate market is growing by 20% every year, powered by the 1.5 lakh-strong HNI population, which is also growing at a fast rate. Almost 40% of the investments made by HNIs in India are in real estate, and for Delhi-NCR, this figure is more than 50%.
A recent report by real estate consultancy firm Jones Lang LaSalle (JLL) also confirms this trend. According to it, despite the global economic and financial crisis, the Indian residential market is relatively stable in general, as demand for luxury housing grows gradually. This growing demand can be attributed to the rise in the number of HNIs, the rapid pace of urbanization, the influx of global lifestyle trends and an increase in the number of NRIs. Also, the recent fall in the value of rupee in global financial markets has boosted buyers’ interest in investing in luxury housing and encouraged developers to launch luxury-super luxury housing projects.
Reports indicate that the luxury housing market is expected to grow at a CAGR of 26% over the next few years. Surprisingly, however, the fastest pace of growth is being seen, and also expected, in the super luxury residential segment, with unit areas of more than 5,000 sq feet and a price tag in the range of Rs 5-30 crore, and even more in some cases.
The premium housing market is estimated to account for just 5% of the total residential market, but is the fastest growing segment. It is estimated that premium housing may grow at a CAGR of 80% through 2012-2014 and around 9,000 units of luxury housing units are slated to be launched over next two to four years.
The luxury housing market is mostly prevalent in metro cities and a few Tier I cities like Bangalore, Pune, Gurgaon, Hyderabad, Kochi and Noida, and major developers in this segment include Lodha Group, Tata Housing, Sobha Developers, Ireo, Godrej Properties, Raheja, Puri Constructions, DLF and Unitech, among others.
Although the Tier II cities are still at a nascent stage in luxury residential launches, some of these cities, too, have now started registering demand for such properties. Earlier luxury housing was restricted to a couple of metro cities or high-end clusters. However, from some time now such projects are coming up even in suburbs like Bhiwadi, as the nation’s burgeoning middle-class segment with vast disposable incomes is vying for luxury living.
The outlook for premium housing also remains positive in view of the fact that HNI customers are usually least affected by any economic imbalance happening internally or externally. And, thankfully, there has been a considerable rise in the number of the super rich in the past couple of years, which will go up further. By 2015-16, the number is expected to reach 2.19 lakh households with a net worth of Rs 2.35 lakh crore, from 62,000 households with a net worth of Rs 45,000 crore a year ago. It is also true that the Indian consumers are more aware of the international trends and aesthetics now, and even willing to spend more to live their dreams.
In fact, the buyers’ growing preference towards world-class lifestyle and quality projects is also forcing a host of developers to focus on exclusivity while offering a whole gamut of lifestyle features and amenities. The industry is also experimenting with different types of product offerings from Singapore-styled apartments to branded-luxury apartments to create a differentiation.
Branded residences, which are highly successful internationally, are now generating a lot of interest among luxury home seekers. Developers are tying up with international fashion and design brands to woo buyers with inspirational design creations and modern fittings and fixtures like home automation, branded kitchens and Italian-marble flooring. Among the amenities being offered are state-of-theart fitness and recreational areas, concierge services, and pick-up and drop laundry service, to name a few.
Thus, with rising aspirations and many other factors tilting in its favour, the growth prospects of luxury housing seem to be bright. The fact that luxury and ultra luxury residential projects are being announced in leading metros in India is a sign that the country’s appetite for such homes is growing as more and more uber successful first-generation professionals and businessmen are springing up. The premium housing segment, for sure, has a double digit growth potential,” J C Sharma, the MD of the Bangalore-based Sobha Developers, says.
A majority of industry experts also think on similar lines and say that with the HNI population in India growing at a fast rate of 20% per annum and with 40% of their investments going into real estate, the demand for luxury housing is only set to increase.
Also, new trends and concepts like branded residences and independent villas providing exclusivity within a gated community with modern lifestyle features and amenities will further evoke interest among buyers in the luxury segment.
Data Source- Internet & Newspapers
Alok Kumar Upadhayay
Real Estate Professional