Luxury homes are catching up again in the real estate market as the country has seen the launch of houses worth around $2 billion last year. Such houses were launched during a time when the country was facing slowdown in the real estate segment. Nearly 5000 homes that are priced over 3 crore were launched across prime cities during the same period when the absorption struck supply in the realty market.
“Luxury real estate usually does well during recession or sluggish environment as we are seeing even now. In a highly uncertain environment, the super-rich clientele prefers to put their money into these hard assets than any intangible service or instruments,” said Sanjay Dutt, Executive Managing Director South Asia, Cushman & Wakefield, reports Sobia Khan and Kailash Babar of Economic Times.
The luxury home sales in prime cities like Mumbai, Gurgaon, Pune, Bangalore and Chennai have witnessed price rise of 6-23 percent year-on-year, which is a clear indication of upward movement. For example, Mumbai has seen the luxury home sales of 789 units compared with 652 new luxury residential launches. Whereas, Gurgaon has seen the home sales of 792 units against 726 new launches and Chennai has seen home sales overtaking new launches by 17 percent.
On the other hand, cities like Pune and Bangalore have witnessed less number of sales compared ti new launches but the price has increased by 10 percent year-on-year. “Real estate continues to be the most preferred asset class with rich Indians due to higher returns. However, clients are only investing with reputed builders, who can deliver on time,” said Rajesh Iyer, head — investments and family office, Kotak Wealth Management.
This real estate market scenario occurred when rest of the realty segment were experiencing sluggish growth. “Luxury home is the reflection of social status and lifestyle for the rich, which they can flaunt to friends and family. While some park money in buying luxury homes for mere investment, others are upgrading to get like-minded neighbours,” stated BM Poonacha, head — land and special projects at LJ Hooker Project Marketing India.