Luxury Housing Trend Catching up in India

Bangalore:  Soaring demands for luxury property in residential segment and end-users interest to park their investment in luxury housing has grabbed the attention of developers to launch luxury and super luxury housing projects, with price bracket of 1 crore and 15 crore.

For example, some of the luxury projects include Lodha Aurum Grande, Lodha Fiorenza, Mahagun Marvella, Orris Aster Court, Oberoi Exquisite and Raheja Revanta, Unitech's Nirvana Country2 Espace Premiere. Furthermore, in NCR region, many more luxury projects are coming in as well, reports Sanjeev SinhaSanjeev Sinha of ET Bureau.

To lure buyers, developers are now trying out variety of new products in luxury housing segment, such as Singapore style apartments and branded luxury residences.  On this note, Patel further stated that "This has managed to attract the interest of buyers in the luxury market, who previously had to look outside the country for such options."

However, the demand for luxury housing is growing gradually and the trend is catching up at a faster rate in the Indian real estate sector regardless of the economic and financial crisis across the globe. NRIs are one of the main sources who are driving the demand, by showing more interest in luxury housing segment after the drop in rupee value, adding to it is the increasing number of high net worth individuals (HNI) in India, with 40 percent of their investment are into real estate sector.

Adding to this, Patel stated that "The luxury housing market is currently seeing a greater influx of end-user demand, in contrast to the previous trend of the investment-driven purchases. This has further been helped by the construction linked payment plans on offer by most developers." reports Economic Times.

Dinesh Gupta, the chairman of Prabhatam Group, cited that "With the rapid pace of urbanization, the new urban families are craving for luxury homes that are fully loaded with global amenities enjoyed by the NRIs worldwide. Luxury housing is primarily catering to the high-end investors and consumers and is gaining a huge momentum as luxury has become a necessity for the urban households today."  Currently the Group is coming up with luxury projects, super luxury projects and studio apartments for high net worth individuals (HNI) and NRIs in cities like Amritsar, Bhopal, Dehradun and Indore.

According to Gupta, the trend of luxury housing has become an attractive concept even in Tier I and Tier II cities. As the majority of middle-class segment are entering the HNI category and opting for luxury housing. The changes have been observed within the developers as well, who are now showing more interest in this segment and also looking forward to deliver their luxury housing projects to a new set of buyers.

In today’s date, most of the buyers are seeking quality products, which are compelling the developers to come up with luxury projects tying-up with global property developers and architects. These developers are mainly developed their projects in Tier I and Tier II cities.

The growth and demand for luxury housing seems optimistic in Indian market. On this note, N Sridhar, group director of Mumbai-based DB Realty cited that "The changing demographics of the country coupled with the rising aspirations have pushed up the demand for luxury housing. According to analysts, the annual sales of semi luxury and luxury houses are expected to grow at a CAGR of over 30 percent, over the next few years, as there is constant up gradation of consumer's standard of living and purchasing power.” at present, the  group is coming up with luxury projects like Orchid Crown, Orchid Heights and Orchid Woods.

According to industry experts, affordable housing projects are now making their move slowly for some time.  Chintan Patel, director at Ernst & Young cited that "The rise in affordable housing projects, owing to the 2008 economic downturn, and the oversupply in the premium housing market is currently going through market lethargy. Exponentially increasing interest rates, rise in cost of building materials and increasing labor charges have put developers in a fix with regard to profitable execution of such projects.”