Why Luxury Segment Continues To Attract Home Buyers?

Aakash Ohri, Senior Executive Director, DLF Home Developers Limited. As restrictions begin to lift all around the world, people are looking closely for investment opportunities. Placing their quality of life at the fore

BY Realty Plus
Published - Tuesday, 24 Nov, 2020

Why Luxury Segment Continues To Attract Home Buyers?

Aakash Ohri, Senior Executive Director, DLF Home Developers Limited. As restrictions begin to lift all around the world, people are looking closely for investment opportunities. Placing their quality of life at the forefront of their decision making, some of these investments will inevitably mean relocation to a new home. With the rising high and ultra-high net worth individuals and pent up demand for this segment, despite the pandemic, the Elite residential market in India is estimated to be growing and is in full swing of development. The luxury and super-luxury housing segment have managed to keep the growth potential of the Indian real estate market high and intact, despite a slowdown in the economy. The last three months have witnessed a fierce renewed demand and interest by homebuyers looking to invest in properties for end-use especially since June but with very limited offerings in the segment. Recent industry reports have also indicated that buyers in this segment have been impacted far less, primarily as unlike other segments, the luxury housing market relies more on personal income rather than home loans. Additionally, the decision to invest in luxury properties by HNIs & UHNIs, is largely driven by their wants, rather than their needs. Today Indian developers are delivering projects of international standards, attracting buyers not just from India, but overseas too. Apart from the high net worth individuals (HNIs), who have been more resilient to the financial impact of the pandemic, the NRIs have spotted their remunerative path to invest in the Indian real estate market. With an outlook to come back to their roots due to the deteriorating business prospects overseas, more and more NRI buyers are looking towards India for investment opportunities. Their increasing purchasing power coupled with a spike in the exchange rate of the US dollar, will further boost the demand in this segment, especially in cities like Mumbai, Delhi, Gurgaon, Bengaluru, and Hyderabad. As well-traveled global citizen, they are in constant look-out looking for upmarket opulent experiences. Among other Indian cities that have recorded a rise in demand for luxury properties, Gurugram stands out observing not just an increase in sale, but even rising luxury rentals. In the past decade Gurugram has emerged as a preferred choice for luxury homebuyers with large presence of HNIs and UNHIs base. There has also been a significant rise in the number of affluent millennials in the region, who prefer to stay close to work, and are willing to go the extra mile for their convenience and indulgent lifestyle. Assented as India’s newest corporates hub, Gurugram today has some of the most expensive commercial and residential real estate, attracting investments from across India and world over. With a vibrant culture and a lifestyle at par with some of the most modern cities, today it is a home to a large expat community. Haryana’s new industrial policy, which is likely to come into effect from the 1st of November this year, is expected to further improve the ease of doing business in the state, stimulating immense opportunities and investment in the real estate sector. There has also been a newly stirred up insistence on luxurious integrated townships and RTMIs that offer affluent homes and safety to the homebuyers. The pandemic has coerced the luxury buyers to urge for the best when the idea of health and safety has kicked in. Townships with dining options, retail spaces, hotel-like amenities, wide-spread green stretches, medical facilities, schools, etc. in its purlieu, have brought renewed interest in buyers. With the state-of-the-art designs and architecture, the superlative buyers are inclining more towards these townships. The work from home trend has also added to the demand for luxury homes that offer both quality of life and function as a good investment. Anyone who was looking to buy suddenly had this sense of urgency, leading to closures in the past quarter. The trend has also led to a rise in demand for luxury rentals, especially in Gurgaon where rentals surpassed the pre-Covid period in certain properties. The trend is expected to sustain and grow as comfort and luxury become the driving force for the buyers despite the pandemic. While experts seem to believe that some form of change in buying behavior will continue even post-pandemic, but there is hardly a decline in demand in cities like Delhi, NCR, Mumbai, Bangalore and these cities are not likely to shrink or lose their appeal. Instead, buyers will continue to invest in this category, but now specifically in properties that cater to their present desires in a post pandemic scenario.