Luxury real estate sales gain pace amid pandemic

In south Mumbai, 55% of total sales belonged to houses above Rs 5 crore.

In south Mumbai, 55% of total sales belonged to houses above Rs 5 crore.

Sales of luxury homes in India have gained momentum after the onset of the pandemic, as consumers look for more amenities. The share of luxury houses in overall residential sales across the top 7 Indian cities has risen 3 percentage points, from 7% in 2019 to 10% in 2021.Of the 261,360 units sold across the Mumbai Metropolitan Region (MMR), Delhi-NCR, Bengaluru, Hyderabad, Pune, Chennai and Kolkata in 2019, 18,300 units were in the luxury segment, according to data sourced from ANAROCK.

This number increased to nearly 23,700 units in 2021, while the overall sales of houses tapered slightly to stand at over 236,520 units. The increased momentum in sales continues, as in the last five months (October 2021 to February 2022), the sales share is anywhere between 10-12%, data showed.

In south Mumbai, 55% of total sales belonged to houses above Rs 5 crore. Central Mumbai, which clocked total sales of Rs 25,000 crore, had Rs 15,500 crore coming in from luxury segment with houses priced at above Rs 5 crore. The same trend continued in the central suburbs too with 80% of sales marked by apartments above Rs 2 crore and almost a third of the sales in eastern suburbs belonged to apartments priced between Rs 1 crore and Rs 5 crore. These findings were from a recent CREDAI-MCHI and CRE Matrix report.

Ramesh Ranganathan, CEO, K Raheja Corp Homes, told FE there has been an upward swing in the appetite for luxury properties, encouraging developers to curate ready-to-move-in, luxury residences, that provide a combination of healthy lifestyle, high-end amenities, and distinctive design. Aakash Ohri, group executive director & chief business officer at DLF, said the luxury buyers category has expanded in the last two years. 

Also, high net-worth individuals (HNIs) and non-resident Indians (NRIs) are driving sales in this segment again after a lull. 
Anuj Puri, chairman, ANAROCK Group, said, “Luxury homes are once again seeing high demand by HNIs and NRIs because of the attractive prices and the need for a second home away from home.” “While there has always been an appetite, people have preferred other asset classes to invest in rather than real estate, which has significantly changed since the onset of the pandemic. In the past, it was fashionable to buy luxury products, but today’s discerning buyers have directed their purchase decisions towards luxury homes,” he said.

According to Puri, larger sizes, which is one of the defining characteristics of luxury properties, have become a priority. Additionally, low interest rates, developer discounts and offers, favourable government policies such as the stamp duty cuts in Maharashtra, and a desire for state-of-the-art amenities have further contributed to this momentum.

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