The year 2022 has seen phenomenal growth in the luxury real estate market; the ascending figures are higher than those of the last three years. This segment alone generated 12% of overall sales in the first quarter of 2022, compared to 7% in the first quarter of 2019 according to industry figures. Indian HNIs and NRIs are playing a significant role in pushing this niche segment of real estate deals. A compelling data point is that affordable housing, the ticket size of 40 lakhs and below, has fallen to 31% in the first six months of 2022 compared to 38% in 2019. It has been particularly affected by the pandemic, as this segment of buyers has suffered the maximum financial consequences. The middle class has faced loss of livelihoods and wage cuts and as a result their demand for housing has had a negative impact.

The HNIs, on the other hand, were financially secure during this time, but were constricted in their homes and were affected in other ways. This time has ushered in a new trend of demand for expansive homes and expansion into larger spaces. Extravagance has become a necessity to balance the adversities of the pandemic. Business tycoons, CEOs and founders of well-funded startups began seeking opulent mansions in lavish locations with an abundance of high-tech amenities and lush green landscapes.

This customer group requires homes with custom workspaces with esoteric layouts with exceptional furniture and entertainment areas, biophilic designs, uninhabited roofs, basal and uncontaminated indoor environments and other contemporary specifics for serene living. The Indian market has meanwhile matured in terms of projects in this segment as well. Major property developers offer ultra-luxury residences with high-end amenities in the heart of metros, such as Karol Bagh in New Delhi. Many of them collaborated with Versace for interior design while maintaining greenhouse living standards.

Non-resident Indians have recently become very willing to invest in their motherland and form a large contingent of the luxury residential sector. Many factors influence the decision of this segment of consumers. The drop in the value of the rupee which automatically gives them an advantage is a factor as well as the deep concessions offered by the developers. Additionally, during the pandemic, non-resident Indians felt the emotional need to stay connected to their roots and decided to buy properties from home. NRI investments stood at nearly USD 13.1 billion in 2021 and is expected to grow by 12% in 2022.

Luxury’s growth trajectory is also influenced by people wanting a home away from home, a factor again driven by the pandemic. Remote working has become the norm, and many have taken up residence in the hills and small towns away from the bustle of big metros. This is when the redundancy of physical office spaces took hold and people realized that work could just as well be handled remotely. Due to this realization, many people with the financial means have started to consider second homes in scenic and picturesque hill or beach locations.

The increased predilection of HNIs and NRIs to invest in luxury residences in the form of villas, penthouses, bungalows, etc. breathed new life into the otherwise sluggish real estate industry, serving the progress of the market. The sales figures of the luxury segment are expected to exceed all previous criteria in the near future. This craze for luxury real estate by HNIs and NRIs has proved to be a buffer against the effect of the pandemic on the country’s real estate sector.

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