Delhi-NCR saw two listed real estate developers launch luxury projects in the range of ₹7 crore to ₹12 crore recently which the realtors said had been lapped up in a matter of a few days. Demand for luxury and ultra luxury homes among wealthy Indians has gone up and this, say real estate experts, is primarily on account of few launches in the luxury housing segment and the fear of missing out (FOMO) on the most desirable properties in town.
There is less supply chasing high demand for luxury properties, especially in markets such as Gurgaon and Delhi. Rich investors in Delhi, who would earlier buy into bungalows, are now preferring housing communities with modern amenities, especially dedicated parking space that is a major challenge, say real estate experts.
Real estate major DLF said last week that it had sold more than 1000 luxury housing units that are part of its latest offering Privana South in Gurugram, for ₹7200 crore, within three days of pre-launch. The enclave will comprise 1,113 luxury residences across seven towers. These would be 4 BHK apartments and penthouses. ‘DLF Privana South’ will be part of a larger development, DLF Privana spread over approximately 116 acres in Sectors 76 and 77.
Also Read: DLF sells luxury residences in Privana South in Gurugram for over ₹7200 crore ahead of official launch
Listed real estate company TARC Ltd also announced last week that it has plans to invest close to ₹1200 crore to develop a luxury housing project comprising more than 400 units in Central Delhi. The project TARC Kailasa is a 1.7 million sq ft development spread across 6 acres of land located on Patel Road, in Kirti Nagar. The project will have five high-rise towers of 35 floors each and will be designed by Andy Fisher Workshop, a Singapore based architectural firm. Arabian Construction Company is the construction contractor.
TARC MD and CEO Amar Sarin said that luxury housing is here to stay as buyers, especially those residing in bungalows, are now aspiring to upgrade to apartments with modern amenities, where all their requirements, especially with regard to security and parking are met.
Also Read: TARC to invest ₹1,200 crore in developing luxury housing project in Central Delhi
Luxury projects gaining traction
“It is a continuation of the trend that started in March last year. Overall the interest in luxury properties is strong, especially from real estate developers with a good track record. This momentum is expected to continue in 2024. We can expect more launches in the luxury category to continue as developers continue to buy land,” said Mudassir Zaidi, Executive Director – North at Knight Frank India.
Ashim Chowdhury, Vice President – Research, ANAROCK Group said that the DLF Project successfully launched in Sector 76/77 Gurgaon on the Southern Peripheral Road (SPR) establishes the future potential of the micro market.
Proximity to the National Highway, the further connectivity to Dwarka Expressway and the Mumbai Expressway makes it a coveted location in the city. A luxury product of this magnitude, offering over 1,000 units, is most likely to pave the way for many more luxury launches in the vicinity and set a new benchmark for pricing. The prices in Gurgaon are already on the rise as the focus shifts from affordable and mid segment to high end and luxury projects along the emerging micro markets, he said.
As per ANAROCK Research, as many as 4,76,530 units were sold across the top 7 cities in 2023, of which the share of luxury home sales priced more than ₹1.5 crore stood at 25% comprising sale of approximately 1,19,130 units. In terms of share, the luxury sales have seen 7% jump in overall share between 2023 and 2022. If we consider data on a unit-wise basis, there has been a whopping 81% yearly jump in the number of luxury units sold in 2023 – from approximately 65,677 luxury units sold in 2022 to nearly 1,19,130 luxury units sold in 2023. This indicates the growing demand for luxury homes across the top 7 cities.
Share of NRIs investing in luxury properties on the rise
Real estate major DLF selling more than 1000 luxury housing units that are part of its latest offering Privana South in Gurugram, for ₹7200 crore, within three days of pre-launch, shows that demand for luxury properties remains robust.
“Buyers continue to invest with credible developers with an impeccable track record. The demand for luxury properties continues because capital markets are doing well, there is more wealth at peoples’ disposal and they have the aspiration to upgrade to better homes, said Amit Goyal, managing director, India Sotheby’s International Realty.
The fact that a sizable portion of demand for this product came from NRIs shows that the segment continues to look at India for their retirement needs, he added.
Lifestyle upgrade main reason behind increase in demand
The affluent gravitate towards ultra-luxury homes for a multitude of reasons. Beyond being a symbol of status, these residences offer more than just space – they embody a lifestyle, shared with like-minded people. “The demand for these homes is driven by a desire for superior amenities, a healthy lifestyle, spacious living areas, distinctive designs and a prestigious address,” said Ramesh Ranganathan| CEO, K Raheja Corp Homes.
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“We have seen 70-75 percent of our sales coming from the ultra-luxury developments followed by the mid-premium/luxury segment. A large part of our luxury sales is from Mumbai, where we have projects ranging from 3 crore going up to 50 crore. In the realm of luxury real estate, it is a deliberate choice by these discerning customers to invest in a bespoke and unparalleled lifestyle,” he added.
Delhi versus Mumbai
Delhi has been a horizontal real estate market all along with buyers preferring bungalows to apartments.
“Delhi is witnessing a trend that Mumbai saw decades back. The success of these luxury properties can be attributed to limited luxury residential supply. Also, it is the track record of the developer that is leading to increased traction in sales. In contrast, there are several options available to Mumbai buyers in the luxury category and that is also one of the reasons why it may take six months to a year for a developer to exhaust inventory they hold in the segment,” explained Ritesh Mehta, senior director, and head (West and North) of residential services and developer initiatives, JLL.