Hindustan Times
Real Estate
Real Estate
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Why are rich Indians scooping up luxury homes?
Luxury homes priced ₹50 crore and above are on the rise. According to JLL, the combined sales for the years 2022 and 2023 in the luxury residential market were worth ₹7,177 crore. At least 45 luxury homes were sold in 2023 as compared to 29 homes in 2022.
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Mumbai leads in luxury sales
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Mumbai led with a total of at least 29 luxury homes sold worth ₹3,031 crore. Delhi NCR followed with at least 12 homes sold worth ₹1,043 crore. Bengaluru also saw at least four such transactions with a total sales value of ₹245 crore, the JLL report said.
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An investment decision
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Ultra-luxury homes are being bought by high-net-worth individuals for investment, personal use, or both. In recent times, capital appreciation has overtaken lifestyle upgrade as the primary motivation, a report by India Sotheby's International Realty has said.
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Booking profits made from the stock market
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Several investors who have made gains in the financial markets and booked profits are investing in luxury real estate anticipating potential volatility during elections.
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Fear of missing out
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Fear of missing out (FOMO) on the most desirable properties in town as the supply of luxury properties is limited is yet another reason why rich Indians are lapping up luxury properties.
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Who are the buyers?
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Multi-billionaires that comprise industrialists, Bollywood stars, and start-up founders continue to purchase spacious sea-facing apartments in the more than ₹1.4 lakh per square foot plus range across Mumbai, Delhi, and Bengaluru.
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Diversified real estate portfolio
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Apart from primary luxury residences, 34% own commercial real estate, 25% holiday homes, 21% agricultural land and 20% farmhouses. As many as 35% of holiday home buyers said that they preferred Goa as a second home destination. 12% preferred properties overseas, as per a Sotheby's report.
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High demand, low supply dictates prices
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It is the paucity of housing supply in the luxury category that dictates the high price.
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Luxury apartments preferred over bungalows
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Luxury apartments were preferred over bungalows by the high net-worth individuals. Apartments accounted for 58% of the total luxury deals, while bungalows made up the remaining 42%. Almost 92% of apartment deals were in Mumbai and most of the bungalow transactions were recorded in Delhi NCR, said a JLL report.
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