Despite a decline in demand for luxury homes in recent years due to lack of takers and most high net-worth individuals looking to invest their money elsewhere, industry experts feel that luxury housing is not going away any time soon and that the segment would continue to grow.
As per a recent report released by Anarock Property, the unsold housing stock in the luxury segment dipped across the country from 48,300 units in the first quarter of last year to 42,650 units in the first quarter of this year. While this indicates that unsold inventory is getting cleared up, it also means that most developers are not opting for the luxury segment anymore.
Avneesh Sood, Director, Eros Group, agrees and says that the slowdown in Indian residential real estate over the last few years has caused most high net-worth individuals to shun luxury housing and look at other investments within or outside real estate.
“It’s also obvious that when there are few takers for the current inventory, developers will not even think of launching new projects. Even clearing the inventory will take time at the current sales volume,” he said.
Anirban Chatterjee, co-founder, HedgeHomes, says that the demand for luxury homes has gone down in recent years, and that due to policy thrust and financial support from housing for all scheme, more developers are keen on making inroads into the affordable segment.
“The latent demand for affordable housing always existed but with regulatory and government support and increasing urbanization, more and more developers are finding the segment lucrative… With strong implementation, I strongly believe the affordable housing segment is expected to be the next big growth driver of the Indian economy,” he said.
However, Sood adds that while luxury housing is not rising spectacularly in the overall sweepstakes, it’s not going away either.
“The robust Indian economy, coupled with the mushrooming of a myriad successful start-up, has given rise to a new breed of entrepreneurs who have not acquired old wealth but earned it. These people, largely millennials, have risen above the middle-class median and prefer to live accordingly. Such demand is not swayed by market sentiments and warnings signals - it has its very own propulsion engine which does not run on regular fuel,” he said.
Ashok Mohanani, Chairman, EKTA World, sees a positive sign in declining numbers of unsold stocks of luxury homes and says that it means there’s more scope for further projects.
“The unsold housing inventory in the luxury segment dropped across the country from 48.300 units in the first quarter of last year to 42,650 units in the first quarter of this year. It clearly shows that luxury housing is in demand when it comes to the end consumer. There is a certain customer segment from which there will always be demand for luxury homes. Most premium buyers like a good mix of amenities and green spaces, hence luxury projects which provide these effectively will definitely witness good sales,” he said.
“Going forward, with more and more buyers looking to buy affordable properties on the account of several incentives such as lower GST rates, and other value adds being done by various developers will increase absorption,” he added.