The luxury housing market in south India not only remained largely insulated from Covid-induced disruptions, but the pandemic spurred demand for larger, ready-to-move-in (RTMI) homes. As governments and businesses recalibrate their moves, the market is witnessing a growing interest from high net worth individuals (HNIs) and NRIs looking for a stable asset class and service-rich and managed residences.
The momentum in luxury real estate in south India in the last few months is expected to continue in 2021, especially in the IT-ITeS and manufacturing-driven cities of Bangalore, Hyderabad and Chennai. Besides a healthy concentration of HNIs and NRIs, the need for homes with multi-purpose usable areas within an integrated township offering connectivity, state-of-art amenities, exclusivity and large open spaces is also sustaining the demand.
Embassy Group’s president (residential business) Reeza Sebastian said south India has always been an attractive real estate market for NRIs due to the right pricing, higher rental yields, on-time completion of projects and trusted developers.
Bangalore-based Puravankara’s managing director Ashish Puravankara said, “We have observed a significant rise in demand for 3 BHK, 4 BHK and villa projects. From our internal anecdotal data, we understand that buyers are not looking at the size of houses in terms of square feet per se, but are rather looking forward to having more rooms in order to use them for home office, workouts or home schooling.”
While Brigade Enterprises’ CEO (residential) Rajendra Joshi said the segment improved significantly in Q4 2020. Top players continued to generate strong sales due to market consolidation. Bookings by NRIs are expected to increase as demand for large size units and finished inventory is gaining momentum.
Anarock Property Consultants chairman Anuj Puri said buyers in luxury housing are out in the market for various reasons. Discounts and multiple offers doled out by developers have made such properties far more lucrative and attractive for several buyers. It also scores high with NRIs as a depreciating rupee translates into greater buying power.
“Additionally, real estate has always been an important diversifier in HNI investment portfolios — now, amid a pandemic that has shaken up the financial and stock markets, it remains a reliably stable asset,” he said.
Square Yards principal partner & head (India sales) Rahul Purohit emphasised that southern cities like Hyderabad, Bangalore and Chennai have historically been relatively more resilient to market dynamics. Southern cities have always been less speculative than their northern counterparts. This has stood them in good stead at times of unexpected market exigencies, he said.
“Also, the inclination towards larger homes and villa development in the south has only grown in the post-Covid era, which has in turn resulted in a spike in demand for luxury segment in these cities. Hyderabad and Bangalore have seen an uptick in sales of properties priced above `1 crore and also for uber-luxury properties pegged at `5 crore and above,” he said.
Going ahead, luxury residences promise to sustain the current momentum. “We witnessed a nearly 140% jump in sales and enquiries in Q4 2020 and strongly believe that this trend will continue in the upcoming quarters where we see increased interest from NRIs and end-users looking for service rich and managed residences,” said Embassy’s Sebastian.
Brigade’s Joshi agreed. “We do not anticipate much of a change, in fact, we saw sales going back to pre-Covid levels in the last couple of quarters in the luxury segment and that will remain consistent going forward,” he said.
Puravankara said, “We are buoyant about the luxury sector, given the traction in last few quarters. We can expect this momentum to continue over the next quarters in 2021. Our ultra-luxury line World Home Collections’ first offering in Bangalore was a runaway success, and this prompts us to replicate this is Chennai and Mumbai in the next few quarters.”