Luxury homes continue to show good momentum even during Covid times. Here's why.
Spurred by stable property prices, buyers’ need for bigger homes, lucrative deals and discounts doled out by developers, and good traction from both HNIs and NRIs, luxury homes continue to show good momentum even during Covid times.
For instance, the Covid-19 pandemic notwithstanding, 2020 saw a reasonable uptick in sales of luxury homes (priced >Rs 1.5 crore) in Delhi-NCR. A total of ~23,220 homes were sold in NCR in 2020 across all budget segments, and luxury housing accounted for over 4% of this. In Noida, about ~3,240 homes were sold in 2020, and 9% of these were in the luxury segment. In Gurgaon, about 7,240 units were sold during the year, with luxury homes accounting for 5%.
Interestingly, in times of the pandemic, NRIs are once again scouting for luxury homes in India. According to a recent consumer survey by ANAROCK, at least 73% NRIs now prefer properties priced between Rs 90 lakh and Rs 2.5 crore. In the pre-COVID survey (H2 2019), just 41% preferred properties within this price bracket and most favoured affordable and mid-segment homes. However, 3 and 4 BHK homes currently top their wish-list and the IT hubs of Bengaluru (24%) and Pune (19%) are seeing the highest NRI demand. Collectively, these two cities saw close to 48,370 homes sold in 2020 — accounting for a 35% sales share among the top 7 cities.
However, “even as the NCR witnessed a modest sales increase, developers reduced the new supply of luxury housing – only 9% of overall 18,540 homes sold in 2020 fell in the luxury segment; in 2019, this share was 12% or 35,280 homes. In fact, the only NCR cities which received new luxury housing supply in 2020 were Gurgaon, Noida and Ghaziabad,” says Anuj Puri, Chairman, ANAROCK Property Consultants.
In Gurgaon, the highest number of homes (approx. 7,240) was sold in 2020, and 5% of these were luxury units. 6,950 homes were sold in Greater Noida in 2020, with only 2% falling in the luxury segment. “In Noida, about 3,240 homes were sold in 2020, and luxury homes accounted for a 9% share. In Ghaziabad, 3,780 homes found buyers in 2020 and a mere 1% was in the luxury segment. Faridabad too saw restricted luxury homes sales – only 1% of the total of 7,860 homes sold in 2020 fell in the luxury category,” informs Puri.
Whatever be the case, NCR-based developers are quite upbeat about the growth prospects of luxury housing going ahead.
Pankaj Bansal, Director, M3M, says, “Today’s discerning customers — who prioritize their modern needs and are willing to spend on a well-planned condominium with clubs, amenities, leisure spaces — have contributed towards the growth in the segment. With new luxury supplies in NCR, the region witnessed significant growth within the luxury segment. Ease in investment opportunities has also led to good traction from HNIs in India’s real estate segment and the demand will continue to show an uphill trend in 2021.”
Some developers are of the view that buyers are currently looking for not only luxury homes but all types of homes with bigger spaces.
Karan Kumar, CMO, DLF Ltd, says, “Since the onset of pandemic, there has been a shift in demand for bigger spaces, not just in luxury but across all segments. Anyone who can afford is looking to upgrade to bigger spaces given the fact that they are spending more time at home. Buyers whose financial condition and lifestyle remained unaffected have developed a great interest in second or bigger homes. The COVID-19 has reinforced the significance of spacious homes for indulgent living and as a stable investment,”
The extended work from home will continue to nurture the buyers’ decision of purchasing a home. The need to upsize has already led to surge in big-ticket transactions and this trend is expected to continue even in 2021. The work-from-home phenomena has created a robust demand for high-priced properties that can serve as catch-all compounds, live-work spaces, and offer a resort-like living.
However, “in a post-pandemic world, home buyers are not just looking for big spaces, but also homes with incredible view, set in a big piece of land and a notable architecture, that supports their vision of modern, luxurious, and sustainable living. Today more than ever, buyers are looking for bigger balconies, perhaps that half extra room that could be converted into a study room, or perhaps a little more seating space within the bedroom where they can set up their own temporary workstations. The focus is also on multi-utility rooms. Depending on the family’s requirement, a study room can double as a guest room, or a pooja room can become a study room,” says Kumar.