With demand for luxury residential properties in India at an all-time high, the market is currently seeing an unprecedented growth.
Several factors are contributing to this surge, including a preference for large, well-appointed homes in the post-pandemic period, the country’s massive economic growth, tremendous infrastructural development, immense wealth creation, the rise of high-net-worth individuals, startup founders seeking to capitalize on their stake sales, dwindling land banks, and rising land costs.
A significant factor behind the increasing popularity of luxury homes is the rise of millennials. Constituting around 36% of the population, their immense wealth, coupled with a global outlook, has made them a decisive force in the market. This generation is on a massive house-buying spree; according to a recent estimate by CoreLogic, 54% of home purchases in 2023 were by millennials. Additionally, non-resident Indians (NRIs) are investing in luxury homes as a means to protect their wealth from currency fluctuations and diversify their portfolios.
Urbanization is another key driver on the supply side. As more people move to cities for better job opportunities, the resulting pool of high-income individuals necessitates the need for high-end residential complexes. This urban expansion has led to a significant increase in luxury home sales in Delhi-NCR, Mumbai, Hyderabad, and Pune. For example, Delhi-NCR sold around 3,300 units in the first half of 2024, marking a 13.8% increase from the previous year.
Real estate developers have quickly adapted to this transformation. As the initial supply was rapidly absorbed, companies expanded their portfolios to include more luxury projects.
The Indian luxury real estate market is booming, with sales of high-end properties increasing significantly. In 2024, the market size is estimated to be $38.02 billion, and it’s expected to grow to $101.92 billion by 2029. This growth is fueled by the rise in high-net-worth individuals, the purchasing power of millennials, and the desire for luxurious lifestyles.
Manoj Gaur, Chairman of CREDAI National and CMD of Gaurs Group, says, “The Indian luxury homes market has never been this robust. Besides various factors, the increased preference for such homes is driven by enhanced lifestyle aspirations and the desire to live in iconic addresses developed by reputed builders. As incomes have risen, so have expectations. The ultra-wealthy are not just looking for a place to live; they want a luxurious home that also represents a sound investment with a higher ROI.”
Amit Modi, Director of County Group, adds, “At the same time, limited land supply and increasing land costs have made affordable and premium housing a thing of the past. As a result, projects now fall into the top-end bracket, offering features, facilities, and amenities on par with the best in the world. These projects have become architectural masterpieces, incorporating cutting-edge technology and sustainability features. These homes are not just about living; they’re about making a statement.”
According to a report by Cushman and Wakefield, 61% of new residential projects in Q1 2024 were in the luxury segment.
“The luxury segment is a lucrative market. With the demand for exclusive homes growing, developers are pushing the boundaries of design and technology. They’re not just building homes; they’re creating landmarks. The focus is on sustainability, innovation, and delivering a product that resonates with the affluent class. This trend is not limited to Delhi-NCR; other cities are catching up too,” says Yukti Nagpal, Director of Gulshan Group.
Rajjath Goel, Managing Director of MRG Group, comments, “Along with the desire to live in top-end projects with all the amenities and facilities, the luxury real estate market offers promising opportunities for investors as well. By understanding the market’s dynamics and aligning strategies with economic cycles, investors can achieve substantial returns. It’s not just about buying a home; it’s about making a smart investment. Delhi-NCR has been at the forefront of this luxury boom.”
Yash Miglani, MD of Migsun Group, notes, “In recent years, there has been a significant shift towards luxury housing. Coupled with economic growth and infrastructure development, high-net-worth individuals are seeking spacious, comfortable homes with world-class amenities and aspirational values. Delhi-NCR, especially the Noida Expressway, Greater Noida, and Yamuna Expressway regions, have emerged as sought-after locations. Even though we might experience a slight slowdown in demand, this, at best, will be temporary. Overall, luxury housing makes sense for self-occupation, rental, and investment purposes.”
The demand for luxury homes in India is driven by a combination of factors—rising incomes, lifestyle aspirations, urbanization, and infrastructural development, such as the construction of Jewar Airport. This is an exciting time for both buyers and investors in the luxury real estate market.