In February, an image went viral showing a large crowd gathered at the office of real estate developer DLF after the launch of a new project. The rush was to purchase a flat in that project, which was priced at 7 crore. DLF confirmed last week that it had sold 1,137 such projects in its Gurgaon unit.
This is not a one-time occurrence. According to Knight Frank data, the average value of properties registered in Mumbai in February 2023 was 1.9 crore, which is 65% more than the average value of properties registered in February 2022, which was 1.18 crore.
The demand for luxury housing in India has recently been extremely high. There is nothing that money cannot buy when it comes to luxury housing. Think heated pools and spas, community gardens where you can grow your own herbs and veggies, a 24x7 clubhouse with pool tables, games, a business centre and a coffee bar, a fitness centre with high end cardio and strength training equipment.
"If we define 2 crore and above as the general reference point for luxury housing, there was an offtake of nearly 6,000 units in the top seven cities in the last quarter with a gross sales value of nearly 22,000 crore." There has been a new supply of approximately 12,800 units in the top seven cities during this time period.
In terms of sales share, the Mumbai Metropolitan Region (MMR) and National Capital Region (NCR) are at the top of the list, accounting for more than half of the total. This is followed by Bangalore and Pune, which have a 20% and 15% market share, respectively. In the luxury segment, Hyderabad and Ahmedabad had less than a 10% share. "Demand for luxury housing in India has recently increased." The expansion of the Indian economy, which has created a new class of wealthy individuals with high purchasing power, is one of the primary reasons for this. They are willing to invest in premium living spaces that provide exclusive amenities, first-rate services, and cutting-edge facilities," says Anuj Puri, chairman of Anarock Group, a real estate services firm.
Another reason for the increased demand for luxury housing in India is the urban population's changing lifestyles and aspirations. "Many people are seeking a luxurious and comfortable living experience, which has led to an increase in demand for high-end residential properties with a variety of amenities, such as swimming pools, fitness centres, and spas."
The Covid-19 pandemic has also increased the demand for luxury housing in India. The pandemic has influenced how people live and work, with many people seeking larger homes with more space to accommodate work-from-home arrangements and other lifestyle changes.
The government's recent move in the Union Budget 2023-24, which will go into effect in April 2023, could be a major factor in high sales of high-priced homes in Mumbai and other major cities.
If a person sells a house or other assets, including equities, and his or her gains exceed 10 crore, the maximum benefit that he or she can receive when investing in another property is only up to 10 crore. Capital gains of more than ten crore rupees will be taxed beginning in April 2023.
"As a result, high net worth individuals (HNIs) across top cities, including Mumbai, are rushing to close luxury housing deals before the fiscal year ends in March," says Puri.
"In the context of India, luxury properties typically refer to high-end residential properties that offer a variety of amenities and features." These properties are in prime locations, upmarket neighborhoods, or central business districts, and are designed with a focus on providing a luxurious and comfortable living experience to their residents," says Amit Goyal, CEO of the luxury estate brand Sotheby's International Realty in India.
There is no single definition of luxury housing, and it varies by city, depending on the local real estate market.
"For example, luxury housing in Mumbai may refer to high-rise apartments with ocean views, whereas luxury housing in Delhi may refer to large villas with private gardens and swimming pools." Similarly, luxury housing in Bangalore may include gated communities with world-class sports facilities and spas," Puri says.