Manoj Sharma
High-end real estate rates soar in the country as global demand attracts high networth investors
There has been a definite turnaround in the real estate market. After the Covid-19 pandemic, homebuyers are increasingly opting for larger and more luxurious homes. This surge in demand for luxury housing, defined as projects priced above Rs 1.5 crore in most Indian cities, has led to a substantial increase in the launch of new projects in this category. According to a report from real estate consultancy Anarock in October, out of the 116,220 units launched in Q3 2023 across various price brackets in India's top seven cities, approximately 27 per cent were in the luxury category. This represents a significant rise from Q3 2018 when luxury housing comprised only 9 percent of the total units launched. Anuj Puri, Chairman of Anarock Group says “This quarter's luxury supply is the highest in the past five years. Moreover, ultra-high-net-worth individuals (UHNIs), with a net worth of $30 million or more, have have interest in the luxury real estate market.
Popular destinations for Indian real estate investments abroad include London, Dubai, Singapore, Australia, and New York. Dubai, in particular, is a favoured location due to its tax-friendly environment, business opportunities, and the benefits of golden visas. In Q1 2023, Indian investors contributed 20 per cent to all property transactions in Dubai, totalling close to $2 billion. London is also attractive for its potential for capital growth, strong rental yields, and an easy purchase process.
But interestingly enough India is also emerging as a chosen destination for UHNIs across the world. Now it ranks just below the UK, UAE, and USA and is at par with Canada. In terms of regional trends, Hyderabad led in new luxury supply in Q3 2023 among India's top seven cities, followed by the Mumbai Metropolitan Region (MMR). The demand for luxury homes is notably driven by high-net-worth individuals, including corporate C-suite executives and startup entrepreneurs, residing in these cities. The desire for expansive luxury properties as alternative living destinations, particularly those offering a second home in green surroundings, has become a significant aspect of the Indian ethos post-pandemic.
The future of commercial real estate in the United States is undergoing significant changes, marked by uncertainties in the economy, shifts in technology, and transformations in how and where people work. The industry's tectonic changes, including inflation, interest rate increases, and technological shifts, impacting the demand for various types of properties is the reason new destinations are emerging. To fill in the supply side many new ventures are coming up. Godrej properties, Mahindra lifespaces, Oberoi reality were already there and are now upbeat Many new ones are joinging them. For instance, Forbes Property, a JV of media house Forbes has ventured into properties its Indian arm is already in the business. In India's 14 Tier 1 cities, including Delhi, Mumbai, Hyderabad, Bengaluru and Chennai, there have been 4.13 lakh new launches, out of which there were 14,754 luxury projects (per unit more than INR 5 crore) and almost all, 14,654 had immediate takers. It is noteworthy that luxury projects make up nearly 4% of the total launches. Michael W. Jalbert, CEO, of Forbes Global Properties, is optimistic about the India story. “Our expansion into India is particularly meaningful. The nation's burgeoning markets present unlimited opportunities for discerning buyers and investors seeking ultra-luxurious homes, coveted estates, and premium developments,” he said. Their first offering will be in New Delhi. It has tied up with the JV of Orange Smart City in Navi Mumbai for the development of 1200 acres of land. Indeed, after a short lull due to the pandemic, the Indian property market is all set to reach dizzy heights!
(The writer is a market consultant;
views are personal)
