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Are Buyers Leaning More Towards Luxury Homes
Premium houses today are more popular than ever. Read on to know why they are becoming the top choice among homebuyers
Comfort, privacy, top-tier amenities, and more are on the priority list of current homebuyers. According to data released by Anarock Research, the share of luxury residential launches priced between Rs 1.5 crore and Rs 2.5 crore, as well as those above Rs 2.5 crore (ultra-luxury), has surged from nine per cent in 2020 to 25 per cent in the first half of 2024, reflecting a rising demand for luxury homes.
“The luxury real estate market in India is booming, with top cities like Mumbai, Delhi, Bengaluru, and Pune leading due to their business hubs and thriving industries. Emerging markets such as Hyderabad, Chennai, and Goa are also growing rapidly, thanks to the presence of the IT sector and tourism. Sales of luxury housing units priced at Rs four crore and above increased by 27 per cent from January to June, reaching approximately 8,500 units across seven major cities. The market is expected to reach USD 38.02 billion by the end of 2024, growing at a CAGR of 21.81 per cent, with high net-worth individuals (HNWIs) increasingly investing in luxury homes; their numbers are set to rise by 63 per cent between 2020 and 2025,” says Aarti Harbhajanka, co-founder and CFO at Primus Partners, a management consulting services firm.
Luxury homes as smart investments
Domestic and international buyers are increasingly investing in luxury homes as an asset, shaped by factors such as location, property type, and market trends. “Luxury homes are tangible assets and offer potential for appreciation, and can also generate substantial rental income,” highlights Anuj Puri, chairman of Anarock Group.
“However, the focus isn’t on quick returns or high return on investment (ROI). They often serve as long-term assets, passed down through generations. The ROI in India’s luxury market varies due to multiple factors, making it difficult to provide a one-size-fits-all figure. Currently, the market is stable, a sign of maturity less prone to speculative bubbles. However, it remains susceptible to economic fluctuations and policy changes impacting HNWIs. While luxury homes offer value retention and appreciation potential, ROI is often secondary for buyers in this segment, who prioritise lifestyle benefits, prestige, and personal enjoyment,” explains Kishore Reddy, CMD of a construction firm in Bengaluru.
What do buyers seek from luxury homes?
Homebuyers in India seeking luxury real estate prioritise exclusivity, prime addresses, stunning views, privacy, and expansive, opulent living spaces. “Other factors influencing luxury real estate purchases include the brand value of the developer, design, and architecture, while also blending nature and local heritage with technology and sustainability. Buyers seek more than amenities; they want bespoke experiences such as concierge services, heated pools, wellness facilities, and access to five-star hotel services,” shares Reshmi Panicker, executive director - land services and residential at Knight Frank India. Buyers also value ease of commute, and proximity to central business districts and social or educational infrastructure. Reddy notes, “Buyers in this category look for exclusive amenities that cater to niche interests such as sporting facilities, private theatres, and decks with panoramic views, reflecting a desire for status and privacy.”
“There’s also a trend of buying homes with smart technology and sustainable design, reflecting the growing focus on convenience and eco-conscious living,” adds Ramesh Ranganathan, CEO of a real estate conglomerate. Furthermore, the increasing trend of working from home has made it essential for HNWIs to have dedicated home office spaces and access to high-speed internet.
Future trends
In the coming years, one can expect several key trends to shape the luxury real estate market in India. “First, there will be an increased focus on sustainability and eco-friendliness, with more luxury homes incorporating green features such as energy-efficient designs, solar power, and rainwater harvesting,” asserts Harbajanka. Technology will also play a pivotal role, with smart homes becoming the norm in luxury living. Buyers will increasingly demand homes equipped with advanced automation systems, from security to climate control, offering both, convenience and enhanced safety. “People can also expect a rise in homes that offer integrated health and wellness features including spa facilities, and biophilic design elements. Customisation and personal touches will be important, as buyers want unique homes that fit their style,” highlights Panicker.
Source: Times Property