Returns Fade, Investors Shun Buying Luxury Homes

Bangalore: In metros like Delhi, Mumbai and Bangalore, luxury housing prices are not increasing at a fast space as they were two year before. In this condition, wealthy investors are moving away from making any investment in luxury home segment, as a result, the market is turning to buyer’s market from investors market for the first time in two years, reports Ravi Teja Sharma of Economic Times.

When the market started to improve after the economic depression in 2008-09, real estate developers started launching ultra-luxury apartments at low-volume which proved to be a high-value business. However, over the past two years, the prices of such luxury apartments have touched the sky.  

Since, the market is witnessing sluggish movement, the property sales under luxury homes have started to shrink from the beginning of 2012. As, the property prices for luxury homes are high as always, now investors have started to shy away from the market thinking there will be a price correction in future.  

Therefore, the number of luxury apartments sale has dropped to nine out of every 100 apartments,  which  was 20 two years ago, according to Samarjit Singh, Managing Director of IndiaHomes, a property broking firm.

Moreover, in metros like Delhi, Mumbai and Bangalore, there is a huge bulk of unsold under-construction luxury apartments. Out of a total number of 63,662 high-end luxury apartments, nearly 19,332 are laying unsold in Delhi-NCR, Mumbai and Bangalore, according to PropEquity data. However, there are a large piece of unsold apartments in projects which were launched in the past 12 months.