Uptick in luxury housing sales to continue in the post pandemic era

The luxury housing segment sales in India has seen a surge post pandemic, as more people are opting for larger spaces with modern amenities including dedicated rooms for work-from-home. 

In India, sales of luxury housing priced at Rs 4 crore or above, jumped 97 per cent year-on-year (Y-o-Y) during January-September of 2023, according to the latest CBRE report. Total sales of luxury units during the nine months of this year stood at approximately 9,200 compared to 4,700 units during the same period last year.

Among the leading cities, Delhi-NCR, Mumbai, and Hyderabad emerged as the top three markets dominating sales, cumulatively accounting for nearly 90 per cent of the total luxury housing sales across the top seven cities. 

Delhi-NCR topped with a share of about 37 per cent. This was followed by Mumbai, Hyderabad, and Pune, accounting for approximately 35 per cent, 18 per cent and 4 per cent respectively.

A recent Anarock Consumer survey revealed that during pre-Covid (H1 2019), only 9 per cent of the respondents preferred to buy luxury homes priced at over Rs 1.5 crore while in its most recent survey (H1 2023), as many as 16 per cent  respondents preferred to buy luxury homes.

“Post pandemic, we saw homebuyers preferring bigger homes amid work-from-home and e-schooling realities and this trend continues till date even when life has returned to normalcy. And one of the key features of luxury homes is its big size,” said Santhosh Kumar, Vice Chairman of Anarock Group.

He further added, “Moreover, there was minimal impact of the pandemic on the luxury home buyer class who are out in the market for various reasons. Discounts and multiple offers doled out by developers initially during the pandemic further made such properties far more lucrative and attractive for several buyers. It also scores high with NRIs due to the depreciating rupee translating into greater buying power.”

Mumbai-headquartered Hiranandani Group believes post pandemic, home buyers are inclined towards more spacious homes with well embedded amenities and better utilitarian value. The company has been witnessing an uptick in demand and incremental sales value in the luxury housing segment.  

“Since the market is very conducive to real estate, we are bullish on the sustainability of demand for mid- and luxury housing. The banks and Foreign Institutional Investors (FIIs) are also optimistic about home loan credits due to stabilising interest rates and the fact that the buyer segment has broadened due to feasibility,” said Niranjan Hiranandani, MD, Hiranandani Group. 

“Furthermore, NRIs are investing across key property markets in branded one and two bedroom homes through the facilitation of a conducive market ecosystem,” he added.

In light of the positive trajectory in the luxury housing segment, Hiranandani Group expects the segment to grow at a CAGR of 10 per cent for CY24, Hiranandani said.

The increase in sales is on the back of a growing economy and an increase in aspiration levels, leading to elevated lifestyle investments being made by affluent consumers, according to Anshuman Magazine, chairman and CEO – India, South-East Asia, Middle East & Africa, CBRE. “The luxury segment stands out as an attractive investment avenue for HNIs and NRIs seeking stability amid global economic uncertainties. The pause in the interest rate cycle, incentives and schemes offered by developers during the festive season have further bolstered sales,” he said.

Real estate consulting firm Property First points out an interesting trend where the overall age bracket of buyers considering luxury homes has come down considerably.

“People over 35 years of age are known to be purchasing luxury homes these days and for them, going from Rs 3.5-4 crore has become extremely typical. The new generation of buyers, who are the millennials and Gen-Zs, are savvy, well-informed, have the money at their disposal, and most importantly are adept in planning their future. They understand that investing early has its benefits and they are preferring luxury properties as preferred investment choice. The takers of luxury properties consist of startup founders, CXO level professionals, and NRIs from the middle-eastern countries,” said Bhavesh Kothari, founder and CEO, Property First.

Luxury housing seems poised to remain a lasting trend, driven by a growing inclination among individuals to invest more in their ultimate living spaces. The desire to upgrade to larger homes with increased carpet area and premium features is becoming a defining aspect of contemporary home preferences. “It is estimated that both sales and new launches in the residential sector could reach a ten-year high in 2023 and may exceed the 300,000-unit mark,” said Magazine of CBRE.