India’s super-rich are betting on luxury real estate

India’s wealthy are betting on one of the few promising asset classes with the help of clear titles, as they invest in luxury real estate, continuing a trend that began last year amid the pandemic. Buyers such as business families, startup founders and CEOs have paid Rs 50 crore to as much as Rs 1,000 crore in the past few months for housing.
Luxury home sales in Mumbai and Pune were the highest in four years in 2021 and may set a new record in 2022, according to a joint report by India Sotheby’s International Realty and CRE Matrix. Accordingly, 1,214 luxury residential properties worth Rs 20,255 crore were sold in Mumbai in 2021, compared to 598 units worth Rs 9,872 crore in 2018.

The list of buyers includes Shekhar Bajaj, Head Promoter

and his family; Bharti Enterprises Vice President of Rajan Bharti Mittal; Siddharth Jane Inox; Pooja Duot, wife of Anirudh Duht of the Videocon group; Shalish Dalmia and his wife Natasha; Siddharth Shah, founder of PharmEasy; millionaire stockbroker and retail mogul Radhakishan Damani; Former Managing Director of HDFC Bank, Anita Puri, wife of Aditya Puri, and daughter Amrita Puri; Promoter Anil Gupta, Chairman of Tata Sons N Chandrasekaran and his family; and founder of Akash Educational Services JC Choudhury.

Property consultants said that large families selling jointly owned cottages located in select locations are increasing the supply of high-value properties in Delhi and other metro cities, according to major property owners. The properties are largely owned either by the elderly or by several members of the next generation.

Continuing rise in demand

Most of these properties, especially those valued at Rs 25 crore, have entered the market in the wake of the pandemic. In many cases, the original owner was not alive and the next generation would prefer to sell the jointly inherited property sooner rather than later, said Amit Goyal, CEO of India Sotheby’s International Realty.

“Covid-19 has brought a fair amount of uncertainty into people’s lives,” he said. “We see a keenness among families, especially the elderly, to formalize the distribution of assets to their relatives in their lifetime.”

Most of the homes are located in Mumbai, Goa, Alibaug and luxury Delhi localities like Gaur Bagh, Sunder Nagar and Golf Links.

Sotheby’s Wellbeing Outlook Survey says a quarter of high net worth individuals (HNIs) have purchased property during the pandemic. As many as 67% of those surveyed said they are keen to buy a residential property in 2022, citing lifestyle upgrades and good investment opportunities as the main reasons.

“We have seen a huge increase in demand for cottages in luxury metro colonies or suburban farmhouses from corporate CEOs, entrepreneurs and startup founders who have done very well in their equity ownership portfolio,” Goyal said. He said the uptrend in the luxury housing market continued after the March quarter and into April and May, another indication of market strength.

“Since the pandemic, premium buyers have directed their buying decisions towards luxury homes, as they were earlier investing in other asset classes or luxury goods,” said Akash Ori, group CEO and chief commercial officer.

home developers. “In India, while there was always an appetite, people preferred other asset classes to invest in, which has changed dramatically.”

DLF sold 19 units worth Rs 580 crore in the December quarter of last year at The Camellias ultra-luxury development in Gurgaon. In the second and third quarters of FY22, DLF sold a total of 53 units in camellias for a record Rs 1,617 crore.

“For the ultra-luxury buyer, their home is all about gathering together with like-minded people in a friendly community, a community full of amenities and material comforts that the whole family can enjoy,” said Ramesh Ranganathan, CEO of K Raheja Corp Homes. “These clients occupy key positions in the corporate world, are globally travelled and socially connect with people living abroad who seek only the best.”

Ashwin Chadda, President of India Sotheby’s International Realty, said the luxury housing market in Mumbai did very well last year.

“This is very much in line with the pace of luxury home sales that we’ve seen around the world, including in global cities like London, New York and Dubai,” he said. “We believe this is just the beginning of a very positive and upward residential real estate cycle.”

Mumbai recorded sales of luxury residential properties worth Rs 9,492 crore in the last calendar year. In terms of volume, the number of luxury home sales in Mumbai reached 1,214 units in 2021, compared to 548 in the previous year.

“In Mumbai, several factors helped in the strong sales, particularly discounts offered by builders and incentives by waiving of stamp duty introduced by Maharashtra government,” Chadha said.

Pune has also seen similar trends, with 208 units worth Rs.1,407 crore sold in 2021 compared to 127 units worth Rs.832 crore in 2017.

“House prices have remained somewhat stagnant over the past five or six years across all sectors and price arcs,” said Abhishek Kiran Gupta, CEO and Co-Founder, CRE Matrix. “Informed high-income buyers have used this as an opportunity to buy the right priced assets to create wealth. We are already seeing prices go up and start to go up.”

The concept of home ownership has gained importance during the pandemic. Consumers are looking to buy bigger and better homes from branded developers who have a proven track record of delivering projects on time.

“During the shutdowns, the ultra-rich and ultra-rich have been given the much-needed respite to analyze and bolster their real estate portfolios,” Gupta said.

The sales trend is likely to remain strong this year as 306 luxury residences worth Rs 4,877 crore were already sold in Mumbai in the March quarter.

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