In recent years, the premium real estate space has undergone a remarkable transformation. With sales momentum rising every year since 2021, the premium housing segment has performed well. In the post-pandemic world, overall sales have been rising steeply across the top seven big cities in the country.

The year 2022 has been even better. As per industry estimates out of the total 3.65 lakh units sold across the top seven cities in 2022, about 18 percent (approx. 65,680 units) were in the premium housing category priced over INR 1.5 Cr. Contrastingly, of the total 2.61 lakh units sold in entire 2019, just 7 percent (approx. 17,740 units) were in the luxury category.

What is driving the sales?

What was once considered a niche market for the elite few has now become a mainstream phenomenon, capturing the attention of investors, buyers and even the general public. The ascendancy of premium real estate can be attributed to a confluence of factors, including the increasing wealth of high-net-worth individuals, the rise of global tourism and the growing desire for ownership, exclusivity and opulence.

As a result, these properties are no longer just homes; they are status symbols, investments and works of art. This shift has reshaped the real estate landscape while creating new opportunities for developers, architects and designers to push the boundaries of innovation and luxury.

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Overall, price appreciation is also a big pull for investors and homebuyers. Premium properties have historically shown resilience in the face of economic downturns and have the potential to appreciate in value over time. The price of the upper mid-income segment and premium properties continues to rise steadily. It is particularly true for prime areas. With a high demand for premium properties, particularly in prime locations, the value of these properties increases over time. Hence, many see this as an investment opportunity as well.

An investment opportunity

With more people seeking to invest in tangible assets that provide financial security and prestige, premium properties have become an investment opportunity for families and investors.

Investing in premium properties often involves the pursuit of either capital appreciation or rental income. Furthermore, many individuals are acquiring premium properties for personal use. The Covid-19 pandemic has served as a wake-up call for all prospective homebuyers within the premium housing sector, fundamentally altering their perception of housing. Homes are now regarded not only as places where the heart resides but also as safe havens for health, safety and overall well-being – and in many cases, spaces where work is conducted.

In 2022, many homebuyers and investors have increasingly purchased larger and superior quality homes within more prestigious projects. The trend is likely to persist throughout 2023 and even in the coming years.

The trends

One of the key trends in the premium real estate market is the focus on sustainability and eco-friendliness. As individuals become more environmentally conscious, there is a growing demand for premium properties that are built using sustainable materials and incorporate energy-efficient features. Developers are incorporating green technologies and design principles to meet this demand and attract environmentally conscious buyers.

Another trend in the premium real estate market is the emphasis on wellness and health-oriented amenities. Buyers are looking for properties that promote a healthy lifestyle and offer amenities that enhance their physical and mental well-being. Hence, these properties are now being designed with state-of-the-art fitness centres, spa facilities and wellness retreats.

Additionally, there is a growing interest in premium properties that offer a sense of community and provide a range of social activities. Hence, projects feature exclusive clubs, social events and communal spaces where residents can interact and build relationships. This trend reflects the desire for a sense of belonging and social engagement among premium property buyers.

The outlook

Changing consumer preferences and market dynamics are driving the premium real estate market. Understanding the latest trends in the market is crucial for developers, investors and real estate professionals to stay ahead of the curve and capitalize on emerging opportunities.

One of the key challenges in the premium real estate market is the volatility of global economic conditions. Premium properties are often considered discretionary purchases, meaning that demand can fluctuate significantly during economic downturns. Stakeholders need to be prepared for potential market downturns and have strategies in place to weather the storm

In today’s world premium living reflects changes in societal values and lifestyles. The young buyers of premium real estate are more focused on experiences, smart tech-enabled features, sustainability and community engagement. Stakeholders and markets will need to adapt to these changing preferences and create properties that align with the values and aspirations of the new generation of luxury buyers.

(By Akshay K Reddy, Director, Cornerstone Group. Views are personal)