The strong comeback and rise of luxury homes
Homebuyers are now drawn to the resort-like comfort, convenience, and amenities luxury projects offer and are willing to spend more to be part of them.
The luxury real estate market has made a very strong comeback since the onset of the pandemic. There is now a growing demand for larger homes that provide a healthy lifestyle and bring people closer to nature. Moreover, due to the COVID-19 pandemic, this segment of residential homes has evolved from a snobby connotation to a domain of family health and wellness. Customers are now drawn to the resort-like comfort, convenience, and amenities these luxury projects offer and are willing to spend more to be part of them.
The impact of COVID-19 on homebuyer preferences was highlighted in a recent CII-ANAROCK Consumer Sentiment Survey. According to the survey, “Cheap housing is the lowest priority for the first time, with more than 34% of respondent home seekers focusing on properties valued between INR 90 lakh and INR 2.5 cr.” The majority of NRI respondents preferred luxury properties with a price range of INR 1.5-2.5 crore. Location, social infrastructure, in-development amenities, and the size of one’s home were significant contributors towards the price brackets that we see gaining traction.
In the years preceding the pandemic, the Rs 60 lakh to Rs 1 cr ticket size was growing as the sweet spot in Bengaluru. Following the pandemic, the industry is witnessing strong demand from Grade A players for plots in this price range, as well as luxury homes across segments. Even the 3-4 cr ticket size has seen an excellent offtake over the past two years. A trend not just restricted to Bengaluru but seen across India.
Over the past 22 months, consumers have spent relatively more time in their homes due to remote work and remote education. Thus, families are scouting for larger configurations to accommodate more time at home for everyone in the family, full-time resident support staff, and SOHO (small office/home office) options. High-quality projects from Grade A players with features such as business centers, convenience stores, jogging tracks & green spaces, basic medical facilities, and as much of the outside world as possible connected to the projects are in great demand.
Buyers have realized the value of well-designed and well-ventilated large homes with access to open spaces and thoughtful amenities. Additionally, investor confidence in real estate has increased, with branded developers now accounting for a larger than ever share of the pie, and buyers regarding them as safe investments. The widespread expectations of the next boom in real estate are also driving investors back into the sector as they expect healthy appreciation in strategic micro-markets like North Bengaluru.
The Indian real estate sector bore the weight of the COVID-19 pandemic, and many projected a long period of hardship, particularly for the luxury segment. However, when customers began to gravitate towards luxury homes due to the healthy lifestyle they offer, things began to change, and luxury has now been redefined as a way of living.
Three years ago, product designers were trying to make smaller homes to make them affordable. The same designers are now working on designing bigger homes as there is a clear shift in consumer preferences post pandemic. With stock markets in choppy waters for the past few months and expected to stay that way for some time to come due to the international pressures; and with increasing talk & signs of the next boom in real estate, for Grade A players it is now about being able to match the rising demand on all fronts. Overall, a bull run is coming in Indian real estate! Grab that deal while you can.
(By Maninder Chhabra, CSO & Head – Sales, Marketing & CRM, Century Real Estate)