The luxury housing market is expected to reach greater heights in 2022
In addition to changing people’s lives and attitudes, the coronavirus pandemic has fundamentally changed businesses and the way they operate. This is not specific to the real estate sector. One reason is that post-pandemic, the concept of home ownership has seen a resurgence, greatly boosting the business as a whole.
Additionally, larger and more spacious homes are currently in vogue, in part due to the social distancing conventions that have been established due to the circumstances we find ourselves in and the emergence of the work-from-home culture ( WFH). The elite class and highly paid professionals, for whom money is not a concern, have increasingly come to favor these residences that are bigger, better or luxurious in themselves, with a variety of amenities. , turning their ideal paradise into reality.
Another factor, associated with the pandemic, has recently given luxury houses a boost. Given the uncertainty that has permeated people’s lives, joint families and elderly people have formalized the distribution of their assets, which has led to a large supply of expensive houses entering the market, especially in Delhi, Mumbai and other metropolitan areas.
Therefore, it has come as no surprise to read reports of business families, start-up founders and top CEOs spending between Rs 50 crore and an astounding Rs 1,000 crore over the past few months to buy a residence for themselves. According to a joint report by India Sotheby’s International Realty and CRE Matrix, luxury home sales in Mumbai and Pune hit their highest level in four years in 2021 and could hit another milestone in 2022. A quarter of high net worth individuals ( HNI), according to another luxury survey by Sotheby’s, bought real estate during the pandemic. Up to 67% of respondents said they were interested in buying a home in 2022, citing improved lifestyle and lucrative financial prospects as the main reasons.
Since 2020, according to the majority of real estate experts, sophisticated buyers have preferred to invest in luxury residences over other asset classes or high-end amenities. The sale of luxury homes, villas and bungalows has increased significantly nationwide as a result of this behavioral transformation. The idea of luxury housing has undergone a noticeable change since the pandemic, which is an important aspect that bears on this situation. Buyers now favor houses that offer them enough space for a study room, a gym and other leisure activities in addition to peaceful places with large open and green spaces. WFH and hybrid work cultures have expanded to include the requirement to own a home that can serve as an office if needed.
The demand for luxury homes has also been significantly boosted by the resurgence of NRI investment in Indian real estate. An analysis has revealed that NRI property investments totaled $13.1 billion last year and are expected to grow by 12% this year. These NRI buyers prioritize finding a connected living environment that offers a variety of luxurious places to live, work and play. Their aspirations are a perfect match for the range of luxury home options the country has to offer.
Of note is research from property consultancy ANAROCK that details the strength of the luxury market in the country. Property income in the seven major cities grew by 71% year-on-year in 2021, with the high-end segment (priced between Rs 90 lakh and Rs 2 crore) accounting for 25% of all sales. If recent trends are any indication, the situation should improve a lot and 2022 will see the rise of luxury homes.
(By Yukti Nagpal, Director, Gulshan Group)