As trust and confidence are reinstated in the real estate industry along with the many benefits of a structural reform that GST will hopefully bring in, the luxury segment is on its way to becoming much more extravagant.
By Sanjay Shenoy
Premium and luxury as categories of housing are often defined by factors such as credibility of the builder, product quality, location and neighbouring environment, and the price of the project. Luxury housing is often curated for a class of buyers for whom the price is of little concern. It caters to a set of audience who are not new to the world of fine dining or luxury cars. For them, luxury is the only way of life. And they seek for nothing short of the best when it comes to choosing an abode that is customized for the global citizen. This class of elite will not think twice before investing their fortune, for they have a trained eye for seeking out the finest amongst the parade of glossy homes.
But the buyer segment for luxury has grown to accommodate the ‘nouveau riche’. This category of buyers is highly ambitious. They know luxury when they see it, for their recent success has led them on the path of global exploration of the most premium experiences. And they wish to bring these experiences home for more reasons than one. As the start-up trend prospers and the IT industry flourishes, these young couples and singles alike seek out premium accommodation bundled with smart automation systems. Wine rooms are a must haves along with temperature controlled infinity sky pools that they will soak into after a workout in their private gymnasiums and a relaxing massage in their private spa. However, they might seek a little more assurance on the return of their investments in the luxury segment. It is for this set of buyers and other aspirational customers, that developers seek to make the decision making process a little more comfortable.
While the elite category continues to build traditional and extravagant homes with their own landscapes and royal estates, there is a limitation on that format in modern cities where not everyone can afford large measures of square feet. But at the same time, they do not want to compromise on the luxury and comfort. This is where the concept of modern luxury housing comes into focus, where everything is packaged in a comparatively affordable price.
There is no denying the fact that the amount of investment that is put in luxury homes is a significant one. For some a little assurance on future returns acts as a catalyst in putting in the booking amount, while for others, schemes that ease out the payment process is what works. It is out of this need that developers now offer a few different methods in the form of schemes.
Buyback offers, assured rental schemes, default payment schemes, easy payment schemes and direct discounting are a few of them. While a buyback guarantees future returns in the lump sum, assured rental makes for a steady return on investments in instalments. The default payment scheme allows for more time to put in the money with a 30% booking amount clause and 70% post possession. Easy payments are often a great method for NRIs to put in a fixed smaller amount of investment every month, rather than dealing with the hassle of arranging for a larger sum of currency every 2-3 months. Direct discounting is usually offered with the intention of making the home buying process a happier and more satisfactory one with no extra charges on floor rise, parking space, clubhouse etc.
The recent developments in Indian real estate in the form of policy initiatives to bring about more accountability and transparency in the sector will soon prove to the factor to bring about more growth and stability. As trust and confidence are reinstated in the industry along with the many benefits of a structural reform that GST will hopefully bring in, the luxury segment is on its way to becoming much more extravagant.
(The author is Joint Managing Director, Legacy Global Projects)