August 20, 2022
The beginning of 2022 saw an exponential increment in the sale of luxury real estate. As compared to 2019 where about 18,000 premium houses were sold in the entire year, Q1 of 2022 saw a booming sale of almost 25,000 luxury homes. While post-pandemic inflation might have hit the ‘affordable’ housing sector, premium homes continue to be in great demand. Primarily this can be attributed to a consequential shift to healthier and more luxurious lifestyles, and people’s need for space, security and privacy within gated communities. Moreover, low-interest rates and other favourable policies have further encouraged investment in high-end housing. The unexpected boom in luxury real estate is a curious phenomenon worth investigating.
Factors that influenced the luxury real estate boom:
Affluent buyers today prefer to move into ready-to-buy homes even if that means they have to shell out more. This has a lot to do with policies such as RERA that seem to protect real-estate buyers and encourage investment in real estate. The market in recent times has become more transparent and credible, allowing for more individuals to engage in transactions. Furthermore, the government pushed investments in housing by offering low-interest rates, reductions in stamp duties and tax benefits as well. This has propelled not just potential homeowners, but also investors to look towards real estate as a viable investment option.
The pandemic put many people in peril as landlords were unwilling to lease homes and unemployment rendered many reconsider their financial situations. This led to a rise in investments in the stock market and a shift towards more permanent housing choices. The need for space, especially during quarantines and lockdowns was felt by almost everyone. The affluent few are now opting for luxe living spaces in nature-infused gated communities. This allows them the privacy they need while creating plenty of space to breathe and share their space with their loved ones. The affluent are preferring luxurious comfort within their living spaces, even if it means that they have to commute a little more.
A large number of NRIs (non-residential Indians) and HNIs (high net-worth individuals) are directly affecting the demand for luxury homes in India. These groups are seeking curated living spaces with access to like-minded individuals. Moreover, their housing needs generally surround exclusive and premium amenities within and without their home. In these cases, luxurious gated communities that offer exclusive amenities are preferred. Apart from that, real estate in India continues to serve as a profitable source of investment, promising high returns over the long run.
A large part of India’s working population now has access to remote work even as they continue to work for the same company. This means they save on commute, fuel, formal work wear and eating out. Moreover, they also get the freedom to work from wherever they want to. This has without a doubt encouraged further investment in luxury real estate in pristine and exclusive locations. These professionals can now purchase a lavish home to work from along a coastal state or in a better part of the city of their choice.
Luxury real estate continues to see exponential growth in the real estate market. Post-pandemic policies surrounding real estate and the need for a more opulent lifestyle have encouraged affluent individuals to invest in the best. They do not hesitate in going the extra mile for some added comfort and exclusive access to premium facilities. Moreover, real estate in India is bound to see further growth and this makes it a profitable investment opportunity as well.
Why is luxury real estate booming?