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Indian Real Estate Witnesses Surge in Demand for Luxury Homes in 2024
The Indian real estate sector experienced a remarkable year in 2023, reaching an all-time high in annual sales. However, the noteworthy shift lies in the type of homes preferred by Indians, as they now gravitate towards more expensive properties.
According to a report released by a real estate consultancy in November 2023, the purchase of “luxury” homes saw a massive surge. Between January and October, the sales of these homes nearly doubled to 9,200 units, compared to 4,700 units in the same period in 2022. These luxury homes were priced at or above Rs 4 crore.
Knight Frank released a subsequent report stating that during the July-September quarter, the sale of luxury homes in India surpassed that of affordable homes for the first time. In this case, luxury homes were priced above Rs 1 crore.
Data from Anarock revealed that sales of homes priced above Rs 1.5 crore in 2023 were 6% higher than the previous year. The demand for high-end homes reached a ten-year peak in 2023.
Industry players and analysts interviewed by Business Standard predict that the demand for costlier homes in India will remain robust throughout 2024.
Santhosh Kumar, vice chairman at Anarock Group, stated, “Considering the present trends in residential real estate, demand for luxury homes will continue to remain strong in 2024.” He pointed out that there has been a scarcity of new luxury projects by Grade A developers in markets like Delhi-NCR, which is gradually being addressed by leading developers.
Aman Sarin, director and CEO at Anant Raj Limited, added, “The market is also recognizing the execution capabilities of developers,” further contributing to the demand for costlier homes.
Several prominent developers have announced their plans to invest in luxury housing projects, reflecting their optimism about the demand for such homes. TARC announced a Rs 1,200 crore investment for a luxury housing project in Central Delhi, while Smartworld plans to invest Rs 3,000 crore in a luxury housing project in Gurugram. DLF also unveiled its luxury project, DLF Privana South in Gurugram, which generated sales of over Rs 7,200 crore in just three days.
Nayan Raheja, promoter of Raheja Developers, expressed his belief that the momentum gathered by luxury and super luxury homes will continue in the future. Amit Modi, director at County Group, echoed this sentiment, stating, “We do not expect this demand to come down for a significant amount of time.”
According to analysts and developers, the high demand for luxury homes can be attributed to changing customer preferences, pent-up demand, and the growth of the Indian economy. Vivek Rathi, national director of research at Knight Frank India, said, “The luxury market is witnessing this momentum on the back of pent-up demand created during the downcycle of 2014 to 2020, the intact desire among consumers to improve their lifestyle, and the ability to fund the purchase in the wake of the rise in wealth.” He believes that these factors, coupled with a resilient Indian economy and thriving business environment, will support growth in 2024.
Santhosh Kumar noted that the demand for larger homes due to work-from-home and e-schooling has remained high post the Covid-19 pandemic.
Mohit Jain, managing director at Krisumi Corporation, expects prices of luxury homes to remain stable this year. Additionally, a likely reduction in mortgage rates due to potential key interest rate cuts by the Reserve Bank of India could further boost consumer confidence.
The demand for luxury homes may also be fueled by increasing interest from wealthy Indians living abroad. A Bloomberg report stated that Indians living abroad account for approximately 20% of all home sales in the country.
While the outlook for 2024 remains positive, the long-term demand for luxury homes will depend on the intensity of new project launches. According to Vivek Rathi, the slowdown in demand is typically alleviated by an increased supply of luxury projects within 2-3 years. However, factors such as changes in the business environment, political landscape, and wealth creation could pose risks to the market.
In conclusion, the Indian real estate market is poised to witness robust demand for luxury homes in 2024. The shift towards costlier properties reflects changing preferences, pent-up demand, and the strength of the Indian economy. Developers and industry experts anticipate continued growth in the luxury housing segment, supported by investments and the recognition of developers’ execution capabilities.
Luxury housing in India has been a thriving market in recent years, attracting affluent buyers seeking high-end amenities and exclusivity. However, there are growing concerns about the sustainability of this trend by 2024. Several factors contribute to this uncertainty.
Firstly, the economic landscape of India is evolving. The country is witnessing a shift towards affordable housing and increased focus on middle-income segments. The government’s initiatives to provide affordable housing for all, such as the Pradhan Mantri Awas Yojana (PMAY), are gaining momentum. This shift in focus may result in reduced demand for luxury housing.
Secondly, changing buyer preferences play a crucial role. Today’s buyers, particularly millennials, prioritize experiences and sustainability over opulence. This shift in mindset may lead to a decline in demand for luxurious properties, as buyers seek homes that align with their values and offer a more balanced lifestyle.
Additionally, the COVID-19 pandemic has accelerated the adoption of remote work and digitalization. This has led to a reevaluation of housing needs, with many individuals opting for spacious homes in suburban areas rather than luxurious apartments in city centers. The pandemic has also highlighted the importance of health and well-being, potentially shifting the focus towards homes that provide ample space, green areas, and proximity to nature, rather than extravagant features.
Lastly, the oversupply of luxury housing units in certain cities is a concern. Developers have been competing to cater to the luxury segment, resulting in an excess of inventory. This oversupply, coupled with the aforementioned factors, may lead to a decline in property values and a loss of sheen for luxury housing in India.
While the future of luxury housing in India remains uncertain, it is essential for developers to adapt to evolving trends and cater to changing buyer preferences. This may involve incorporating elements of sustainability, wellness, and affordability into luxury housing projects to remain relevant in the market.
Disclaimer: Only the headline and content of this report may have been reworked by Newsearay, staff; the rest of the content is auto-generated from a syndicated feed. The Article was originally published on Source link
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