Affordability may be the flavour of the season, but luxury real estate remains vigorous. With the demand for reasonably priced housing growth, conjecture around the luxury market has also increased. Though the two segments are poles apart, the market tends to feel that luxury is progressively losing the sheen. Nevertheless, this is not the case.
In India, we have a rising middle-class segment who prefers advancement of their living status and opts for luxury or reasonable luxury. Not dependent on the macroscopic features of the market, the luxury market remains stable in most cases. However, the demand for reasonable housing has picked up pace only in the past 5-6 years. This is not only because of the modification in the home buying sentiments over a period of time but also because of the exertions made by the Government.
Home economics to a niche clientele, the luxury housing market witnessed some agitations during demonetisation, but after that, it is progressively coming back to its sweet pace. The demand comes from a growing number of start-up founders, high-salaried professionals and HNIs who demand properties that are a class apart. In 2017, there was a decay of around 49 per cent in the supply of comfortable homes priced over Rs 1.5 crore, but the situation was brief.
In the last few years, the Indian budget has given rise to new businesspersons who have risen above the middle-class median and prefer to live consequently. The demand shaped by these people does not get affected by market sentiments. The number of billionaires in India stood at 3, 30,000 in 2017 and is predicted to escalate and reach up to 9, 50,000 by the end of 2027. Most of these persons do not have family-accrued money but wealth that was earned by them.
In the Asia Pacific, India is home to the fourth-most High Net Worth Individuals (HNI). The HNI population in this area is protected from macroeconomic threats, and they are more likely to buy homes that are selling for a premium. Because of this, following 2017, there was an increase in supply in the luxury market. In the top cities in the nation, the supply rose by 29% in 2018 compared to the numbers from 2017.
Another indicator of the strong demand for luxury housing comes from the fact that in 2018, just 12% of the total unsold stock in major cities was made up of this type of property. In Gurgaon, barely 10% of the total unsold inventory came from there.
So yes, the demand for reasonable housing is vast, but the unsold inventory in the same segment is also high. This specifies the difference between luxury and affordable housing. While reasonable housing is dependent on market factors and sentiments, luxury thrives on the need of the people to advance their lives. This is a fact that is constant and has worked wonders for the luxury segment. The upcoming luxury housing, therefore, seems to be secure in contradiction of all the odds.
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