The demand for luxury homes in India is rising significantly as the dark clouds of the pandemic have begun to clear.
26 August, INDIA : The demand for luxury homes in India is rising significantly as the dark clouds of the pandemic have begun to clear. The pandemic eroded nearly Rs. 17.4 lakh crore from India’s real GDP, and salary cuts and unemployment hit affordable housing sales. That, however, was not the case with luxury homebuyers.
“Of nearly 1.84 lakh units sold in the top seven cities in H1 2022, about 14 per cent were in luxury homes. On the contrary, of 2.61 lakh units sold in the whole of 2019, only seven per cent were in the luxury category,” an Anarock Group report noted.
On the other hand, the affordable housing segment (units priced under Rs. 40 lakh) saw its sales share dip from 38 per cent in 2019 to 31 per cent in H1 2022. Post-pandemic, affordable housing was significantly impacted because its target audience took the biggest economic hit.
“Even though the typical buyers in the luxury segment were not as impacted by the pandemic as the rest, HNI (High Net Income) buyers are conscious of cost. Discounts by developers have made luxury properties very attractive for these buyers, while NRIs have also been snapping up luxury homes in India because of the favourable exchange rate,” said Anuj Puri, the Chairman of Anarock Group.
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Even before the pandemic began, the real estate sector was facing headwinds from three directions — demonetisation, GST, and RERA. The growth rate of the house price index, too, has been on a downward trajectory since 2016.
Despite the sectoral slowdown, however, the luxury house market is on a roll.
“The disposable income earned in equity-bond markets in juxtaposition with deep savings on consumption outlays during the pandemic season is the primary reason for the spike in housing demand,” Dr Niranjan Hiranandani, MD, Hiranandani Group, told India Today.
This has garnered a huge inclination from HNI buyers to park their accumulated earnings in the luxury property market for long-term gains, he added. NRIs have realised the significance of owning a safe nest back home amidst currency depreciation and geopolitical havoc, he further said.
The Care Ratings report published in April 2021 highlighted that the “Work From Home” or blended work from the home situation has led to homebuyers buying their own space or a bigger space.
Cheap home loans, lucrative payment plans, and attractive prices coupled with favourable government reforms have together supported home-buying activity, especially in places where buyers are able to avail of taxation benefits.
