The changing dynamic of luxury housing in India

Buyers are responding favourably to residential purchases across segments as sale prices have corrected in the last few quarters

The pandemic was a silver lining for residential real estate. Investors and homebuyers alike focussed their attention to spend on buying a home or upgrading their living space. Luxury housing suddenly saw a peaking interest from across demographics.

The luxury housing market was, however, not the same pre-pandemic. In the past decade, it has seen various ups and downs. 2019 was in fact not a great year for real estate overall. Prime markets like Mumbai and Delhi saw a rise in inventory, sky-rocketing rates and instability among key stakeholders. Stalled projects, litigations on developers, aggrieved buyers were on the rise.

Let’s take a step back to understand the reality of luxury housing market back in 2010. Luxury was only for the ultra-rich, HNIs or NRIs back then. Even NRIs focused on investment and opted for homes which assured good returns. Global exposure was just gaining pace and the Indian consumer was yet to evolve. Luxury was focused solely on location and pincode. It was mostly about over-paying for a property based on where it stood.

But the definition of luxury was changing. Aspirations were on the rise with increasing global exposure. As consumers would grow more aware, they wanted luxury and also their money’s worth. Value proposition would become the key focal point for the premium homebuyer.

Slowly by 2013-14, the bar for aspiring to live in a luxury home lowered as many developers started targeting businessmen and CXO level professionals. Consumers too were demanding more from their home aesthetically. Right from safety features, amenities, architecture and interior, there was a wave of increased awareness and want for better living spaces.

However, there was one major limitation. There were limited developers who were in a position to offer lavish properties and they did charge a premium for providing premium projects at prime locations. Luxury housing was limited to Mumbai and Delhi at this point, only extending to a few other metros like Bengaluru.

Bright future