The demand for luxury housing in India varies from city to city, and also the definition of the label ‘luxury’ for a particular city. As such, a 2 BHK in a central location or a location close to major employment hubs in Mumbai, Pune or Bangalore would be defined as luxury based on the location as well as a reasonable degree of good amenities.
The demand for such properties is considerable, owing to the convenience factor inherent in the location in terms of closeness to the most important work hubs of the city and also the value of the addresses. Examples of such high-priced locations are Cuffe Parade, Worli, Lower Parel, Dadar and Prabhadevi in Mumbai and Sahakarnagar, Bund Garden Road, Aundh, Kalyani Nagar and Koregaon Park in Pune.
Another definition of luxury housing on the Indian market is projects with large living spaces embellished with ultra-modern luxurious amenities. Since the land parcels required to develop such spaces are generally not available in the larger cities except in the case of redevelopment of older structures, such projects may not be very centrally located.
Mumbai, Pune, Bangalore, Delhi, Gurgaon and to a certain extent Chennai are the most responsive markets for luxury housing today. Currently, the overall demand for luxury housing is stable. Developers who come up with such projects generally tend to have an inner circle of HNI buyers and investors to which a significant number of units will be sold.
Investors understand that luxury housing is not as prone to the negative influence of recession, since the target audience itself is not dependent on home loans but operates largely with personal funds. The investor and HNI demand for luxury housing is therefore healthy, though the number of buyers who are depend on home loans in order to fund their aspirations for a more luxurious life style has reduced because of the lagging economy. The marketing strategy for luxury homes differs from that of homes aimed at the middle income class. It is more focused on addressing the yen for exclusiveness and status among those who can afford it. Apart from word of mouth among core investors, the advertising for luxury homes is usually seen in status and lifestyle magazines and airport lounges than in weekly property supplements.
Many HNI buyers and investors who look at luxury housing enter the project at the pre-launch or under construction phase and get better rates. However, the prices for ready-to-move-in luxury homes is much higher, and demand for such units has naturally decreased in the current economic environment. Demand from HNI buyers who purchase these homes for personal use is still healthy, as is the demand from long-term investors who seek to rent out these units while the sales market is low and then sell them at a healthy profit once economic momentum revives. The future for luxury housing is very positive in the main cities, but the trend will be slower in smaller cities with less wealth creation and economic advantages.