In addition to altering people’s lives and attitudes, the coronavirus pandemic has fundamentally altered businesses and how they operate. This is not unique to the real estate sector. One reason is that after the pandemic, the concept of home ownership has seen a resurgence, greatly boosting the business as a whole.
Furthermore, larger and more spacious homes are currently in vogue, partly as a result of the social distance conventions that were established as a result of the circumstances we were in and the emergence of the work-from-home (WFH) culture. The elite class and highly-paid professionals, for whom money is no concern, have increasingly come to favour these bigger, better, or luxury residences per se, complete with a variety of amenities, turning their ideal paradise into a reality.
Another factor, which is associated with the pandemic, has recently given luxury houses a boost. Given the uncertainty that has permeated people’s life, joint families and the elderly have formalised the distribution of their assets, which has led to a significant supply of expensive homes entering the market, especially in Delhi, Mumbai, and other metropolitan areas.
Therefore, it came as no surprise to read reports of business families, start-up founders, and top CEOs spending anywhere between Rs 50 crore and an astounding Rs 1,000 crore over the past few months to purchase a residence for themselves. According to a joint report by India Sotheby’s International Realty and CRE Matrix, luxury housing sales in Mumbai and Pune reached their highest level in four years in 2021 and may set a new milestone in 2022. One-fourth of High Net Worth Individuals (HNIs), according to another luxury perspective poll by Sotheby’s, purchased real estate during the pandemic. Up to 67 percent of individuals polled indicated that they were interested in purchasing a home in 2022, citing lifestyle improvements and lucrative financial prospects as top reasons.
Since 2020, according to the majority of real estate experts, discerning buyers have preferred to invest in luxury residences rather than other asset classes or high-end commodities. The selling of luxury homes, villas, and bungalows has increased dramatically nationwide as a result of this behavioural transformation. The idea of luxury dwelling has undergone a notable change since the pandemic, which is a significant aspect that bears on this situation. Buyers now favour homes that offer them adequate space for a study room, fitness area, and other leisure activities in addition to peaceful places with large open and green spaces. The WFH and hybrid work cultures have expanded to include the requirement for owning a home that can double as an office when necessary.
The demand for luxury houses has also been greatly boosted by the resurgence of NRI investment in Indian real estate. An analysis found that NRI real estate investment totaled $13.1 billion last year and is projected to increase by 12% this year. These NRI buyers prioritise finding a connected living environment that offers a variety of luxurious places to live, work, and play. Their aspirations are perfectly matched by the array of luxurious home options the country has to offer.
It is worthwhile to notice a research by the real estate consultancy ANAROCK that details the strength of the luxury market in the country. The top seven cities’ property revenues rose by 71% year over year in 2021, with the premium segment (priced between Rs 90 lakh and Rs 2 crore) accounting for 25% of all sales. If recent trends are any indication, the situation is expected to get much better and 2022 will see the rise of luxury houses further.
(By Yukti Nagpal, Director, Gulshan Group)