Luxury housing trend on a hike
The real estate developers in India seem to have attained a shared understanding that ‘luxury is profitable’ and in today’s competitive world, the term has been so overused and abused that it has lost its significance.
In the past 3-5 years, the luxury residential projects in India have been witnessing an increasing demand by homebuyers of high-income group. Developers have also been showing immense interest in developing high-end projects as the market offers a high margin of profit as well as adding premium to the developers’ project portfolio.
According to data available, during the period of 2008-2012, around 25,570 luxury residential units had come up across the seven prime cities including Mumbai, Delhi-NCR, Bangalore, Chennai, Hyderabad, Pune and Kolkata.
Increasing demand for luxury projects
Luxury projects have a pan-India demand although it may differ from region to region based on the kind of luxury facilities that people look for. The rise in disposable incomes, changing lifestyles, increasing aspirations, etc., are some of the factors driving the demand for luxury housing. Rich people want their residences to reflect their financial status and therefore, in every region, one can find luxury projects that fit the need and necessity of that regionâs buyer segment.
The term luxury is considered to be the prime driver for the sector, and thus being attached to all kinds of projects, starting from high-end condominiums to low-cost projects. This kind of over-usage of the term, is an indication that, the homebuyers in India want nothing else than luxury.
DLF, the largest real estate developer in India, which has developed luxury projects in Gurgaon along with a philosophy of ‘Live, Work and Play’, said that luxury project should also have a holistic aspect. A person living in luxury project but working in a depleted old office, cannot enjoy the luxury living offered at his home alone. Therefore, MNC companies do not prefer this kind of destinations.
Special design, theme and architecture
The luxury residential market is the fastest growing market in India as well as international level. However, developers cannot just add some decor around a low-cost project and call it a luxury project. The luxury housing segment is very competitive compared to any other housing segment. It is about an overall ambience it creates and comforts that are provided, but not just the cost or fancy structure. The location also plays a very important role in case of luxury and ultra luxury projects.
In the present scenario of realty market, homebuyers are not satisfied with only the basic amenities that are provided by almost all residential projects, but they look out for a wide variety of specialised features and modern amenities. Grasping this demand, developers are also trying to encash this demand by exploring a variety of choices including lakeside residences, sea-facing units, poolside apartments, forest-view residences, roof-top restaurants, revolving lounge, terrace gardens, jacuzzi, mini-theatre, private gym, private garden, etc.
Some real estate developers in India have ventured with domestic and international fashion brands for custom design of flats while some developers are providing features like fully serviced apartments with joint-developments with branded hotels that take care of the customers like they are living in a hotel. Some developers are also focusing on developing townships with a golf course, modern landscape such as hills, mountains, etc., that generate more premium than the rest of the market. Also, housing projects that are based on a particular theme, such as Spanish style, European style, French style, German-style, etc are also observing good demand.
Economy’s effect on luxury segment
Despite sluggishness in real estate sector, developers have not lost interest in luxury segment. The current year has already witnessed several launches of luxury/ultra-luxury projects in India by renowned developers like Unitech, DLF, Supertech Group, Godrej Properties, Tata Housing, and many others. The number of luxury units coming up is higher than that of mid or the affordable segment residential units with more and more developers shifting their focus to the luxury market.
Higher input cost
The input costs are much higher in luxury projects than any other type of housing segments. But despite this fact, the developers are benefited from the luxury segment as it helps them to settle themselves in a better position. A developer who has ventured in high-end project tends to gain more reputation than developers who have not launched luxury projects.
But however, the high-end projects can only withstand a very little tolerance for flaws in construction, design or amenities. A mishandled project can highly affect the developerâs reliability and further growth.
