Posh neighborhoods, fabulous views, and heated infinity swimming pools: luxury real estate in India is booming

• There is no one fixed definition of luxury housing and it differs from city to city.
  
• In terms of share in sales of luxury housing, MMR and NCR top the list with more than 50% in all, followed by Bangalore and Pune at 20% and 15% share.
  
• Overall, the demand for luxury housing in India is likely to continue growing in the coming years.
  

In February, there was an image which went viral that showed a large crowd gathered at the office of realty developer DLF following the launch of a new project. The rush was about buying an apartment in that project that was priced at ₹7 crore. Last week, DLF confirmed that it has sold 1,137 such projects in its Gurgaon unit.

This is not a one off incident. According to data by Knight Frank, a property consultant, in February 2023, the average value of properties registered in Mumbai was recorded at ₹1.9 crore which is 65% more than the average value of properties registered in February 2022 at ₹1.18 crore.

Recently, the demand for luxury housing in India has been huge. When you think of 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 center and a coffee bar, a fitness center with high end cardio and strength training equipment, there is nothing money cannot buy.

A mad rush: “If we define ₹2 crore and above as a general reference point for luxury housing, there has been an offtake of nearly 6,000 units in the top seven cities in last quarter with gross sales value of nearly ₹22,000 crore. During this period there has been a new supply of about 12,800 units in the top seven cities in the luxury bracket, which is highest in many preceding years,” says Subhankar Mitra, managing director - advisory services, Colliers India, a professional services and investment management company.

In terms of share in sales, Mumbai Metropolitan Region (MMR) and National Capital Region (NCR) top the list with more than 50% in all. This is followed by Bangalore and Pune at 20% and 15% share. Hyderabad and Ahmedabad had less than 10% share in the luxury segment.

“The demand for luxury housing in India has picked up in recent times. One of the primary reasons for this is the growth of the Indian economy, which has created a new class of wealthy individuals with a high purchasing power. They are willing to invest in premium living spaces that offer exclusive amenities, top-notch services, and state-of-the-art facilities,” says Anuj Puri, chairman, Anarock Group, a real estate services company.

Another reason for the increased demand for luxury housing in India is the changing lifestyles and aspirations of the urban population. “Many individuals now seek a luxurious and comfortable living experience, which has led to a rise in demand for high-end residential properties that offer a host of amenities, such as swimming pools, fitness centers, and landscaped gardens,” adds Puri.

The Covid-19 pandemic has also contributed to the increased demand for luxury housing in India. The pandemic has led to a shift in the way people live and work, with many individuals now looking for larger homes with more space to accommodate work-from-home arrangements and other lifestyle changes.

One major factor for high sales of big-ticket price homes in Mumbai and other top cities could be the government’s recent move in the Union Budget 2023-24 which will come into effect from April 2023.

Under this new move, if one sells a house/other assets including equities and his/her gains are more than ₹10 crore, then maximum benefit that he/she can avail is only up to ₹10 crore when invested into another property. Capital gains of over ₹10 crore will henceforth be taxed from April 2023.

“Thus, to save tax on capital gains, the high networth individuals (HNIs) across top cities including Mumbai are rushing in close luxury housing deals before the financial year ends in March,” says Puri.

Definition of luxury housing: “In the context of India, luxury properties typically refer to high-end residential properties that offer several amenities and features. These properties are in prime locations, upscale 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, India, Sotheby’s International Realty, a luxury real estate brand.

There is no one fixed definition of luxury housing and it differs from city to city, depending on the local real estate market, demographics, and lifestyle preferences.

“For example, in Mumbai, luxury housing may refer to high-rise apartments with ocean views, while in Delhi, it may refer to large villas with private gardens and swimming pools. Similarly, in Bangalore, luxury housing may include gated communities with world-class sports facilities and spas,” says Puri.

For Sotheby's International Realty, luxury property transactions typically exceed ₹15 crore. “However, considering the purchasing power parity in India, we can consider real estate priced at half a million dollars or around ₹4 crore as luxury and above ₹10 crore and uber luxury in the top 7 cities of the country,” says Goyal.

According to the recent Luxury Outlook Survey 2023 conducted by India Sotheby's International Realty (ISIR), properties in the price range of ₹4-10 crore are most preferred by HNIs with almost 65% looking for investment in that range, while 33% of HNIs and UHNIs are willing to spend upwards of ₹10 crore to acquire the right high-end luxury property.

In the new normal, modern-day luxury living is driven by various factors of lifestyle and infrastructural amenities. “Homes closer to key business hubs have increased the availability of luxury residences from a few restricted pin codes, allowing them to be location-independent,” says Dhaval Ajmera, director, Ajmera Realty and Infra India, a developer known for its mid-luxury to luxury housing projects across Mumbai, Pune and Bengaluru.

In Mumbai, Wadala has emerged as one of the most promising home-buying locations with seamless connectivity to the business hotspots of Bandra Kurla Complex, Lower Parel and other prominent parts of the city.

“The overall concept of luxury living is no longer solely connected to the posh localities and has undergone a major transformation. For example, modern-day luxury living is defined as residential properties that provide last-mile comfort and safety along with a plethora of modern experiential amenities that strikes a fine balance between lavishness and ease that overall accentuates the lifestyle of the residents,” says Cyrus Mody, founder & managing partner, Viceroy Properties, a premium real estate developer.

In the lap of luxury: Customers today demand extraordinary experiences. They desire a grand lifestyle and the very idea of luxury has evolved.

“Customers are expecting larger spaces and well-defined homes with over 11 feet floor to ceiling height. There is a rise in buyers of properties as large or larger than 5,000 square feet. The demand is being driven by a clear shift in the thought process of home buyers who desire to go from independent residences to high end luxury apartments,” says Ram Raheja, managing director, S Raheja Realty.

Modern luxury homes have home automation technology that provide the owners total control over maintaining a sustainable work-life balance. “Also in-built spaces like vestibules, expansive decks, and project amenities like heated infinity swimming pools, podium parkings and terrace gardens, are being offered by premium developers,” Raheja adds.

Overall, the demand for luxury housing in India is likely to continue growing in the coming years, driven by factors such as rising affluence, changing lifestyles, and evolving work arrangements.