Why are rich Indians buying properties before the close of the financial year?

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There’s a surge in the number of luxury property deals getting registered across the country just before the financial year comes to an end. The ticket size of these properties range from 10 crore to more than 100 crore. Real estate consultants point out that while the fear of missing out (FOMO) on the most desirable properties in town as supply of luxury properties is limited is one of the key factors, there are also financial reasons behind such property investment decisions.

There’s a surge in the number of luxury property deals getting registered across the country just before the financial year comes to an end. The ticket size of these properties range from <span class=
There’s a surge in the number of luxury property deals getting registered across the country just before the financial year comes to an end. The ticket size of these properties range from 10 crore to more than 100 crore(Pixabay)

One of the reasons could be that several investors who have made gains in the financial markets may be booking profits by investing in real estate anticipating potential volatility during elections, they said.

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Another trend that has been observed is that the ticket size range varies from as low as 10 crore to more than 100 crore. This may be on account of the 10 crore cap on long term capital gains reinvestment under Section 54F that was introduced in Budget 2023, they said.

Here’s a look at some of the recent high-value transactions in Delhi-NCR and Mumbai.

Recently, a 10,000 sq ft apartment at The Camellias by DLF in Gurgaon’s posh Golf Course Road sold for 95 crore.

Also Read: DLF flat in Gurgaon sold for 95 crore

In Mumbai, Bollywood actor Mrunal Thakur along with her father have bought two apartments worth 10 crore from Kangana Ranaut’s family in Mumbai’s Andheri West area.

Also Read: Bollywood actor Mrunal Thakur purchases two apartments in Mumbai from Kangana Ranaut’s family

Eight members of the Halan family, investors in stocks and other asset classes, had purchased four sea-facing twin apartments in K Raheja Corp’s luxury project in south Mumbai for a cumulative deal of 104 crore for apartments spanning 16,000 sq ft earlier this year.

Also Read: Halan family buys 8 flats in Mahalaxmi for 104 crore

Vratika Gupta, founder of a well-known decor brand Maison SIA, had bought a luxury apartment in Mumbai for more than 116 crore in Oberoi 360 West.

Also Read: Founder of decor brand buys luxury apartment in Mumbai for 116 crore

Demand for luxury homes is not limited to posh areas of Mumbai or Gurugram but also spreads to suburban locations. Krishna Kuppuswami Dasarakothapalli, known for films such as The Family Man, Farzi, Stree, Go Goa Gone, had bought a duplex in Mumbai’s Goregaon suburb for 35.50 crore this year.

Also Read: Bollywood director buys apartment in Mumbai’s suburbs for 35.50 crore

Anuj Puri, chairman, ANAROCK Group said that ultra-luxury homes (priced more than 40 crore each) have had an unprecedented bull-run in CY2023, with both the number of sales and sales value of such assets hitting new peaks. The latest ANAROCK Research data finds that CY2023 saw a staggering 281% yearly surge in terms of total sales value of ultra-luxury homes against the whole of CY2022.

A total of 62 ultra-luxury homes have been sold across the top seven cities in CY2023, for a collective sales value of approximately 4,458 crore. In contrast, CY2022 saw a total of 13 ultra-luxury homes sold in these cities for a total sales value of approximately 1,170 crore.

“In terms of ultra-luxury property sales, CY2023 has already made Indian real estate history even before it is over,” he adds.

Anarock data also suggests that out of the total 62 ultra-luxury homes sold in CY2023, at least 12 homes were priced over 100 crore while back in 2022 just nine homes were priced more than 100 crore onwards. 2023 witnessed several home sales (50 ultra-luxury homes) within the price bracket of 40 crore and 100 crore. Back in 2022, just four deals were within this price bracket.

“This clearly shows the current appetite for ultra-luxury homes in the country,” he adds.

Also Read: Rohit Sharma leases two apartments in Mumbai for about 3 lakh per month

Are investors reaping back stock market gains into real estate?

Amit Goyal, Managing Director, India Sotheby’s International Realty, told HT Digital, that there has been a surge in the number of high-end property deals towards the end of the financial year because several buyers who have made gains in the stock market are now booking profits by investing in the property market as the stock market is likely to remain volatile during the elections.

“Having said that, the ticket size seems to have reduced compared to last year after amendments to Section 54 and 54 F took effect following the announcement in Budget 2023,” he said.

March 2023 witnessed a flurry of high-end luxury deals ( 100 crore plus) getting registered as more high net worth individuals reinvested proceeds to purchase luxury properties before April 1, 2023 as from that day onwards the long-term capital taxes exemption towards buying residential units was capped at 10 crore, he said.

Also Read: Is capital appreciation the key motivation for rich real estate investors to buy luxury properties

Ritesh Mehta, Senior Director and Head, West and North, Residential Services & Developer Initiatives, JLL, said that several buyers are booking profits from the share market and investing in real estate, most of them for self use.

“That’s one of the reasons why the ticket size is relatively low compared to last year around the same period. Most deals in the premium segment before the end of the financial year are in the range of 10 crore to more than 100 crore, whereas last year majority of deals were upwards of 90 crore, especially after the long-term capital taxes exemption towards buying residential units was capped at 10 crore,” he said.

“The trend is expected to continue going forward,” he adds.

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