HYDERABAD: Rise above the necessary and when you do that, you are in the lap of luxury. Amid the gamut of luxury projects in India, luxury housing has picked up the most. Modern homes today pack features that meet the growing aspirations of people who want their houses to reflect their social and financial standing. These luxury homes come as apartments, penthouses, suburban villas and bungalows, and are often close to a golf-course or a green expanse. Industry experts attribute the rise in luxury housing projects to the oversupply in the premium segment during the 2008 economic slowdown.
In cities like Mumbai, Delhi-NCR and Bangalore, luxury and ultra-luxury residential projects have witnessed ten-fold appreciation over their launch prices, over the last decade. This implies that there have been more than 100 per cent annual returns on investment. In fact, there has been a tremendous response to these projects; so much so that most of the projects are declared sold-out in a very short span of time. The response in cities like Gurgaon and Hyderabad, where demand has outpaced supply, has encouraged developers to shift their focus to this segment.
Srinivas Reddy, owner, Rajapushpa Properties, Hyderabad, says, “Luxury projects have been doing well since the past four years. Even during the lean period of 2009, luxury and ultra-luxury properties segment performed better than the rest. Nothing has been able to dent the sales of these projects – the recession, separation and not even the bifurcation of state. According to me, this segment will continue to grow in the next quarter also, especially the ORR belt.”
According to a research report, ‘India Luxury Housing Market Analysis’ by RNCOS, a consultancy firm, the luxury housing segment is gaining momentum in India and holds immense potential for new and existing players. The report provides a demand forecast, which is anticipated to flourish in the coming years. Not only metro cities, but tier-II cities have also shown encouraging market developments under this segment. In its housing sector forecast 2015, the RNCOS report says that luxury housing will register maximum growth, owing to the increasing HNI (high net-worth individuals) population and growing aspirations of people looking for a luxury lifestyle. The real estate developers are also focusing on luxury housing, due to high profit margins available in this segment. Luxury and ultra-luxury projects usually garner good pre-sale volumes that help developers in securing significant fund flows, to capitalise on the completion of their projects. “Luxury and ultra luxury projects yield much higher returns for developers than projects geared towards the affordable and mid-income segments,” points out Santhosh Kumar, CEO – Operations, JLL India.
More than the location, an apt description of the luxury housing segment in India, is housing which offers opulent living spaces and ultra-modern luxurious amenities. “The business class buyers from especially Banjara Hills and Jubilee Hills after opting for a cost analysis option are seen moving into gated communities as they get quality and luxurious facilities within the premises,” adds Reddy.
C Pratap Raju, manager, sales and marketing, North Star Homes, Hyderabad, says, “Customers look for specifications like swimming pool, golf course, clubs etc. The luxury projects in the cost range of two to four crore rupees have the highest demand. There is limited competition in these projects and the market is open only for niche clients.” Despite the high input costs, the developer gets brand visibility among highly affluent and top-end clients.
The evolving mindset of buyers emerging from these cities is also changing the shape and specifications that define the term 'luxury homes‘. While there is still a focus on spacious living, there is an increased accent on ‘smart home’ accouterments, high-end common amenities and technologically evolved security. These were certainly not the factors that went into the definition of luxury living a couple of decades back. Today’s buyers of luxury homes are highly aspirational and, more importantly, tech-savvy. That said, there is considerable responsibility on a developer of luxury housing. He must essentially be able to introduce features, which compare with or surpass those in other luxury projects in the market. Buyers for such projects have very high expectations and want their homes to offer, as well as reflect, a high lifestyle quotient. “There is very little tolerance for flaws in design, construction and amenities. Thus, a botched up luxury project can have significant negative repercussions on the developer’s credibility and future success,” says Kumar.