There were improved sales figures and increased interest in high-end properties (Rs 2.5 crore and above) not only by resident Indians, but also by the NRIs, attesting to the fact that the luxury realty sector has gained significant traction and is expected to grow rapidly in 2023.
According to a recent NoBroker.com’s new survey report, homes priced above ₹1 crore and ₹2.5 crore have grown faster. The homeownership sentiment remains strong despite hardening home loan rates and increases in home loans and property prices.
Due to the declining value of the country’s currency against the US currency, the market saw significant NRI investments in 2022, especially in homes with higher ticket sizes. The report states that the NRI segment has grown by 33 per cent, with five countries accounting for the majority of demand: the US, UK, UAE, Australia, and Singapore.
The positive impact of the pandemic with stamp duty waiver, and lower interest rates restored buyers’ confidence and created a demand for larger homes and well-planned layouts.
Rents across major cities have increased by upwards of 12 per cent. The report further adds that there is a strong tendency for buyers to purchase RTMI (ready-to-move-in) properties — 78 per cent — mainly due to uncertainty of under-construction properties as well as no GST. However, this year also saw an inclination toward plots, with 12 per cent looking to buy plots and 10 per cent looking to purchase properties in under-construction developments.
While ready-to-move-in properties were most in demand in Delhi NCR with 85 per cent of buyers, plots were seen as most in demand in Hyderabad with 17 per cent.
Of the total surveyed people, 54 per cent preferred buying a society flat, owing to the security that comes with staying in a gated society flat along with access to modern amenities like a gym, and sports facility. While independent houses accounted for 37 per cent, plots accounted for 9 per cent.
“While the increase in global commodity prices is a big challenge, overall, the environment is good and positive, whether it is commercial real estate, or residential real estate. Companies as well as REITs are doing extremely well, so we are optimistic.
“Compared to the entire world, where the stock market has come down, India is at an all-time high. So clearly, a lot of optimism is there, and the developing markets will do much better than the developed markets,” reports quoted Saurabh Garg, Co-founder and Chief Business Officer, NoBroker.com, as saying.
Other industry reports also indicate that luxury market in India is growing rapidly and real estate tops the list of investment preferences.
According to Bain and Company report, India’s luxury market is expected to grow to 3.5 times and reach US$200 billion mark by 2030, propelled by rising number of UHNWIs (net assets with USD 30 million or more), growing entrepreneurship, strong middle class, greater penetration of e-commerce and demand from tier 2 and 3 cities.
As per another industry report by Knight Frank, number of ultra-rich grew 11 times in the last decade in India, making it third third in billionaire population globally after US and China in 2021.