In the wake of the pandemic, luxury real estate has emerged as a preferred choice for millennials and first-time homebuyers. Current home buying trends and market sentiment analysis indicate that this demographic is increasingly looking to invest in real estate properties that offer a confluence of opulent home designs with leading-edge amenities. The millennial generation tends to have high-income, is highly tech-savvy and appreciative of luxury living. The next generation of homebuyers is looking to invest their disposable income earned in equity-bond markets in juxtaposition with significant savings made on consumption outlays during the pandemic.
It is no surprise that the Indian realty market is undergoing a paradigm shift, as homebuyers look to move away from the conventional conservative thinking in favour of integrated luxury real estate. While traditionally, the buying mentality was often tilted towards quantity and not quality, new emergent trends suggest that the next generation of homebuyers is steadily but surely moving away from investing in multiple small properties, and instead choosing to invest in a single one-time investment that ensures lifetime luxury and high-end comfort. This has been the driving engine for exponential increase in luxury real estate demand across the country.
A ubiquitous trend emerging due to the pandemic is the Work from Home or Hybrid Work Mode phenomenon. This has led new homebuyers to favour real estate that not only provides integrated workspace facilities, but also offers larger property sizes to pivot a dedicated space for their professional commitments. Luxury homes now come in-built with home automation systems that provide the homeowners with complete control in maintaining a healthy and sustainable work life balance.
The pandemic has underscored the significance of living in a healthy environment, while the successive lockdowns made it necessary for properties to incorporate outdoor spaces in residential plans. The new definition of luxury is not roof decks or penthouse terraces, but rather community gardens and green belts that are intertwined with the very premises of the residential complex. Luxury homes are more than living in opulence, security is a key feature that must be taken into consideration. After the havoc caused during the pandemic, family safety is of paramount importance to every new homebuyer. Here is where luxury properties outshine lower asset classes as luxury real estate properties come integrated with state-of-art security features and protocols.
Most luxury homebuyers also tend to prefer ecologically sustainable properties, which comprise of environmentally-friendly green buildings that aim to reduce their carbon footprint and reduce power usage. While lower-end properties may not always be ecologically feasible, modern luxury properties are created using the best industry practices and energy conservation standards to protect the environment at every stage. From air purification to natural lighting, from automated thermostat control to greenhouse monitoring systems and from humidity control sensors to rainwater harvesting protocols, modern luxury homes are aligned with the environment management procedures to reduce greenhouse gas emissions.
This has been a major reason for contentious millennials to prefer this asset class over others. Hence, it can be said that the transformation in the luxury real estate market is greatly influenced by learnings imbibed through the pandemic. The proclivity for best amenities and expansive architectural facades is best personified in high-end luxury flats, which is a driving force for Indians to increasingly choose the luxury segment when deciding on real estate options.
Influenced by international lifestyle standards, the next generation of discerning homebuyers in India is very particular about the luxury home interiors that best reflect their taste and status. Buoyant by this surging demand in luxury offerings, various leading developers have stepped up new supply in the luxury segment, while also offering an assortment of subsidies and discounts on residential asset classes. Market analysts have observed that the first half of 2022 saw the record-breaking launch of over 28,000 units priced above INR 1.5 crore across the top 7 cities in India.
Various state governments looking to stimulate economic growth after the series of lockdowns have also announced various taxation benefits and relaxations in stamp and property registration duty. Out of the 1.84 lakh units sold in the top seven cities in H1 2022, more than 14 per cent were in the luxury homes segment as opposed to only 7 per cent luxury homes sold in the 2.61 lakh units sold in 2019. This demand for luxury homes in India is projected to rise significantly in the coming decades as home loans become more accessible, payment plans become convenient, and prices become more lucrative.
Additionally, with favourable currency exchange rates and government reforms, even young NRIs are looking to buy luxury homes in India. With geopolitical uncertainty in Europe, NRIs and HNI homebuyers are looking to invest their accumulated earnings in luxury properties for significant long-term gains to offset the currency depreciations and supply chain breakdowns. As the next generation of homebuyers is high value for privacy and security, luxury real estate properties that offer serenity interlaced with natural spaces. Hence, millennials have exhibited a high disposition towards buying high-quality luxury homes in the aftermath of the pandemic.
(By Rahul Singla, Director, Mapsko Group)