by THO
The year 2024 was marked by luxury living. The launches of housing projects worth ₹10 crore to almost ₹80 crore made one thing clear – that demand was skewed towards luxury and ultra-luxury homes and that real estate developers left no stone unturned to launch projects that catered to buyers looking for spacious properties that could accommodate their lifestyle and long-term investment goals.
Demand for luxury and ultra luxury homes among wealthy Indians went up and this was primarily on account of few launches in the luxury housing segment and the fear of missing out (FOMO) on the most desirable properties in town. There is less supply chasing high demand for luxury properties, especially in markets such as Mumbai, Gurgaon and Delhi. Rich investors in Delhi, who would earlier buy into bungalows, are now preferring housing communities with modern amenities, especially dedicated parking space that is a major challenge, say real estate experts.
It’s not only the amenities that are drawing the high-heeled to luxurious communities where apartments are worth ₹80-crore and more. It’s the gentry. It is here that they get to live and interact with people who have made it big, the who’s who of high society. The club house of these condominiums offers them a platform to transact business deals while playing poker or sanction investments in the salon while getting a pedicure.
If ultra luxury units worth ₹80 crore are being lapped up by investors in a matter of few days in Gurugaon, Noida is not far behind. Of late, established developers in Noida are launching projects in the more than ₹5 crore range. This is because land has become scarce in Noida and also because of substantial infrastructure upgrades across the city such as the upcoming Noida International Airport. A developer reportedly offered buyers a free Lamborghini with the purchase of a villa worth ₹26 crore in Noida.
In what is touted as Bengaluru’s most expensive land deal, Ajit Isaac, founder and chairman of staffing company Quess Corp, purchased a 10,000 square foot plot at ₹70,300 per square feet, or a total of ₹67.5 crore, earlier this year. In July, a residential property was sold for ₹47.5 crore in the Indiranagar locality.
According to a recent report titled HSBC’s Global Entrepreneurial Wealth Report 2024 that provides an insight into the attitudes of wealthy business owners around the world, including the investing habits of India’s High Net Worth and Ultra High Net Worth business owners, almost six out of ten (61%) Indian wealthy business owners allocate personal wealth to real estate for their own use compared to one in two globally (51%).
Wealthy Indian entrepreneurs also use their wealth predominantly for investment. More than eight out of ten (82%) of India’s rich business owners are investing in stocks, bonds and real estate – the highest percentage amongst business owners in the top 10 global markets, the report states.
Another report by Anarock showed that of the 25 deals closed across cities this year, nine were of large ticket sizes worth over ₹100 crore each, and a collective sales value of ₹1,534 crore. Contrastingly, the whole of 2023 saw 10 such large deals for a collective sales value of ₹1,720 crore.
A total of 25 ultra-luxury homes priced more than ₹40 crore were sold in Mumbai, Hyderabad, Gurugram and Bengaluru in the first eight months of 2024 for a collective sales value of approximately ₹2,443 core, Anarock data showed.
Of the 25 ultra-luxury properties sold across the top cities in 2024 so far, Mumbai alone sold 21 units collectively worth ₹2,200 crore – an 84% share of the total deals in this segment across the top cities. At least two separate ultra-luxury home deals collectively worth ₹80 crore were closed in Hyderabad’s Jubilee Hills. Gurugram in NCR witnessed one ultra-luxury home sold for ₹95 crore, while Bengaluru also closed one deal worth ₹67.5 crore, it showed.
So, what’s driving wealthy Indian business owners to invest in multiple properties in India and abroad?
At least 80% of the total deals were concluded by businessmen, and 12% by senior professionals from across various sectors. Bollywood celebrities and leading legal and medical professionals accounted for the remaining 8%. Experts said that several buyers are booking profits from the share market and investing in real estate, most of them for self use.
Surging Wealth: The rise in the number of high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs) is a significant driver. The 2024 Hurun Rich List highlights a surge, with 1,539 individuals boasting a net worth of ₹1,000 crore or more.
Capital Appreciation: As many as 44% of HNIs and UHNIs according to the India Sotheby’s International Realty viewed capital appreciation as the primary reason for investing in luxury properties, in addition to lifestyle upgrades. Looking at the price rise of luxury real estate in the last 3 years of 15% plus, annually, in most top-end markets – this outlook has been validated.
Wealth Creation and Legacy Building: “Strategic investments in luxury real estate are seen by India’s UHNIs as a tool for multi-generational wealth and legacy creation,” points out Amit Goyal, MD, India Sotheby’s Realty.
Inflation Hedge: UHNI’s are sharp and financially savvy – they understand the value of Luxury real estate as a hedge against inflation, offering stability, he said.
Lifestyle and Status: Lifestyle upgrades remain a motivator, with high-end properties offering exclusivity and status. In fact, real estate projects with excellent amenities have the highest potential for appreciation, he adds.
Economic Confidence: Growing confidence in India’s economy, with 79% of HNIs and UHNIs bullish about economic prospects, drives investments, he said.
In which cities are rich Indians’ investing?
Major metro areas like Mumbai, Delhi-NCR, Bengaluru, and Gurugram are top choices. For instance, DLF’s ultra-luxury projects on Golf Course Road in Gurugram and high-value transactions in Mumbai’s Lodha, Oberoi, projects showcase strong domestic demand. Second Home destinations like Goa and Alibag are experiencing booming demand with marquee villa properties selling like hot cakes.
“Indian-origin billionaires are also making ultra-luxury purchases abroad. Dubai, New York, London and even a few chosen destinations in Europe are something UHNI’s desire to have in their portfolio. Take for example – Pankaj Oswal’s acquisition of Villa Vari in Switzerland for ₹1,649 crore,” points out Goyal.
How many properties do HNIs own?
HNIs are discreet and there is no verified data on coming to this average. “From our experience we can say UHNIs own multiple properties – most own at least two high-end properties in the city of their primary residence – which could be a combination of a bungalow or farmhouse, luxury apartment. In addition they own secondary homes in leisure destinations, and right at the top end of wealthy Indian families, there will be an international asset as well,” explains Goyal.
Are new ultra-luxury launches targeted at this segment?
Real estate experts point out that most listed developers such as DLF, Oberoi, Lodha, Prestige, Embassy, are targeting this affluent segment. In fact, even developers who were not into the luxury segment are veering towards it, and launching luxury projects.
“The growing wealth and appetite of HNIs and UHNIs are encouraging developers to expand the luxury and ultra-luxury segment with increasingly extravagant offerings,” said Goyal.
The luxury housing segment that includes units priced at ₹4 crore and above saw sales increasing by almost 37.8% Y-o-Y during the Jan-Sep 2024 period on the back of high demand, CBRE South Asia Pvt Ltd said in its report titled India Market Monitor Q3 2024 – Residential.
“India’s luxury housing market is witnessing significant growth, reflected in an increase in sales. We also foresee heightened demand in the high-end and premium segments, with traditional mid-range markets like Noida, Bengaluru, Pune, and Chennai increasingly gravitating towards luxury developments. As the market shifts from bungalows to modern apartments and penthouses, the premiumization of amenities will be a key differentiator in luxury projects,” said Anshuman Magazine, Chairman and CEO – India, South-East Asia, Middle East & Africa, CBRE.
Also Read: Luxury housing sales surge 38% in January to September period this year across seven major cities
