Even though the overall realty space was under the grip of slowdown, the higher-end segment always bucked the trend.
Driven by the fast pace of urbanization, higher disposable incomes, new offerings and greater influx of NRIs, the premium housing segment has evolved significantly over the past few years in India. So much so that even though the overall realty space remained under the grip of slowdown during this period, the higher-end segment was always seen bucking the trend.
While the residential real estate did well in 2014 in terms of absorption of right-priced properties, luxury residential real estate fared well in specific cities like Mumbai, Delhi, and Bangalore. And, according to some experts, that trend is likely to continue even in 2015.
“Selective luxury projects, backed by developers who have the delivery track record and credibility in the seven major cities, will do well in 2015. Thus, not all projects will do well as almost every developer has either launched or is in the process of launching luxury projects,“ Om Ahuja, CEO (residential services) of JLL India, said. Delivering a luxury project is not easy and requires a strong track record and excellent execution teams for timely delivery, Ahuja said. What is more, even the supply of higher end homes is likely to moderate in 2015, as developers will now stop focusing excessively on higher-end offerings.
Therefore, while smaller, yet better designed and more efficient homes, will define the residential real estate market in 2015, the supply of luxury homes will moderate to align with the slow demand dynamics for these offerings, a JLL India study said. Some industry experts, however, are still upbeat on the growth prospects for luxury housing in 2015.
Neeraj Bansal, partner (and head of real estate and construction) at KPMG, India, says that India's luxury housing market may grow at the rate of about 30-35% in the short to medium term.
"This market, which is about 5-6% of the total real estate sector, is witnessing strong interest from investors, especially in Mumbai, Delhi, Gurgaon and Bangalore. Besides, formation of a strong central government, improving consumer sentiments and attractive schemes offered by developers - like possession-linked plans, freebies, and gifts on bookings - are driving interest from domestic HNI investors as well as NRIs, which will give it a big boost going ahead", Bansal says.
A Harikesh, senior VP (marketing and sales) of Tata Housing Development Company, says: "With fast-growing urbanization and influx of global lifestyle trends, more and more affluent buyers now want their homes to reflect their financial and social standing. Demand for penthouses, for instance, has been increasing in cities like Bangalore, Delhi, Chennai, Kolkata, Mumbai, and a few others. Attributing to international flavors, housing and living concepts, Indian buyers today keep raising the bar in residential projects."
The requirements, however, may vary from hilltop residences to riverside apartments.While some are opting to live in luxury homes in the suburbs, others are definite that their homes must be `smart' or eco-friendly.