At the end of 2019, about 1.59 trillion worth of luxury housing inventory remained unsold in India, which was –34% of the total value of all unsold homes across top residential markets. There were 89,200 unsold luxury units (homes priced at 1.5 crore or more) in 2019 compared to 81,290 units in 2018. Luxury was the worst-performing segment across all categories of homes.

India’s luxe realty market has seen a slump in the last 4-5 years and during the months leading to COVID. While sales continued to trickle in for a few developers till 2020, the market now appears to have accelerated manifold in the last I year. The under construction luxurious Trump Towers project in Delhi -NCR sold -3 units a month until last year. In 2021, sales have increased to 7 units. The homes are priced at 8-9 Creach.

Other luxury developers also have similar stories of sales recovery. Residential units, 3,000-6,000 sq. ft in size and priced in the range of 3-11 Cr, are selling like hot cakes across the country. Things however, have changed from a demand standpoint over the last few months as the rich hunted for bigger homes.

Low interest rates, favourable govt policies, stamp duty cuts (in Maharashtra), revised circle rates in Delhi and more ready-to-live-in projects revived the sales momentum in recent times. The first 9 months of 2021 recorded home sales of -1.50 lac units in the top 7 cities, of which luxury sales’ share was-12%. In 2019, of the total sales of -2.61 lac units, the share of luxury housing was -7%, according to Anarock Property Consultants. Mumbai, Bengaluru, Pune and Delhi are the key markets driving luxury sales today.

Second homes have also emerged as a hot asset class during the pandemic. Many luxury real estate developers are developing gated communities of luxury villas and farmhouses across Delhi-NCR, Bengaluru, Hyderabad, Goa, Alibaug and Pavna (Maharashtra) with the concept of “home away from home”. With work-from-anywhere becoming the new norm, non-metro locations are suddenly in demand. The price tag ranges between 50 lac and 20 Cr or above. Second homes can also generate rental income and are becoming an investment product. In Goa, second homes can generate an annual rental yield of 6-9%.

Real estate market experts suggest that trust, developer credibility, on-time delivery and rational pricing will continue to play a crucial role in the luxury market.

Source– Source: Anmek Report, Times of India, Me and The Hindu

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