The luxury residential market in Delhi NCR made a promising comeback in 2020 with developers selling 929 units priced over Rs 1.5 crore during the year.
Thoughsales were down 34% Y-o-Y, market watchers say the numbers will rise as demand is mainly being driven by NRIs and HNIs, who are exploring projects with world class amenities and property management, among other factors.
Developers and analysts point out that 2021 will witness more traction in the luxury segment as NRIs and HNIs who have been scouting the market for deals will finalise their transactions in the first half of 2021.
Although sales in luxury housing in Delhi NCR in 2020 were lower on an annual basis, its share of total sales have risen marginally. As per Anarock research, NCR saw total housing sales of more than 23,220 units, of which nearly 4% was luxury, priced at Rs 1.5 crore and above. In 2019, total sales were 46,910 units, of which 3% was luxury.
Anarock Property Consultants chairman Anuj Puri says the scintillating highs that luxury housing experienced in earlier years, especially as a good investment class, are over for good. Today, end users are driving majority of sales. Ever since demonetisation, in late 2016, developers have also significantly curtailed supply within this category, which positively impacted the segment in shedding its previous unsold stock.
“In 2020, while affordable and mid segments continued to drive housing demand, luxury sales saw some movement in NCR despite the pandemic. This is also because the pandemic did not hit this buyer-class economically as much as it did the middle class,” Puri said.
Square Yards principal partner and head (India sales)Rahul Purohit notes that the segment’s promising comeback in Q3 2020 was aided by low interest rates, strong asset value and an appreciation of the need for space owing to shifting work patterns.
“Trend is mainly driven by NRIs and HNIs looking for projects that offer convenience, better property management standards, touchless luxury specifications and an ecosystem with world-class amenities,” Purohit explained.
Properties in Gurgaon locations like Golf Course Road, Golf Course Extension and central Gurgaon commanding prices in the range of Rs 2-5 crore, and Sohna Road quoting prices above Rs 1 crore witnessed significant demand from aspiring homebuyers, he said, adding that luxury homes in Noida Expressway and central Noida with price estimates of above Rs 1 crore also drove much of the demand, with developers resorting to price corrections and recasting payment plans to accelerate buying decisions of consumers and liquidate pending stock.
Going ahead, ABACorp director Amit Modi expects the luxury segment to perform well. “In 2021, the movement will be a little faster as HNIs and NRIs have expedited their search, and will finalise deals in first half of 2021. The deals for homes ranging up to Rs 1.5 crore are likely to be closed in first quarter itself,” he added.
BPTP’s senior VP (sales & marketing) Amit Raj Jain points out that there is a lot of traction on properties upwards of Rs 1.2 crore, as people started to realise that this is the best time to buy houses.
“We consider affordable and mid-housing at up to Rs 1 crore. Then from Rs 1-5 crore is premium and luxury is over Rs 5 crore. Our villas start at Rs 5 crore, where we have not seen much movement. But we are seeing movement in properties from Rs 70-80 lakh to Rs 2 crore. For us premium and affordable are doing fine,” he added.
Raheja Developers COO Achal Raina says Covid-19 has created convergence between luxury real estate and quality living. “With millennials, too, looking forward to own their own luxury dwellings, we expect 30-40% increase in sales in the segment during 2021 calendar year. A major demand has also come due to people spending a lot of time at their homes. The same people have now started searching for bigger and spacious homes with all luxury amenities within the same vicinity,” he added.