Indian Realty Finally Sees Growth In Luxury Housing Sales

Indian real estate is low on sales volume even after the many strategies employed by the various stakeholders. Data available with PropTiger.com show that home sales fell by 11 per cent in the April-June quarter FY20 amidst stable property rates and declining project launches. This overall market behavior leads one to assume that the luxury housing market must be performing even worse but it is not quite so. With the sense that prices might start moving upwards sooner and that luxury housing wouldn’t be as affordable as it is now, high-net-worth individuals (HNIs) and non-resident Indians (NRIs) have started loosening their purse strings. Private estimates show that the unsold housing stock in this segment has been declining across markets.

"The slowdown in Indian residential real estate over the last few years caused most HNIs to shun luxury housing and look at other investments within or outside real estate. However, HNIs are now using the tail end of the slowdown in luxury residential market to their advantage," according to ANAROCK chairman, Anuj Puri.

The rupee fall of last year also prompted NRIs to invest in India’s property markets, which, luckily for them, offered a wide stock to pick from. An improved regulatory regime also provided greater confidence among them to invest in India. So, the number of leads from this segment has risen substantially in the past one year, PropTiger.com data shows.

Typically, NRIs contribute nearly 8-10 per cent to annual housing sales in India. Previous trends show their share in annual sales as improved remarkably in the event of a falling rupee. In 2012, for instance, NRIs accounted for 25 per cent of annual property sales in India at a time when the rupee depreciated over 17 per cent between February and July.

Luxury housing in demand

Numbers available with PropTiger.com show luxury housing projects launched by some of the sector biggies in the past few years, evinced warm response among HNIs as well as NRIs.

For instance, only three units are unsold in Panchshil Realty’s Trump Towers, Pune, that was launched in 2012 and completed in 2015. The rates have also appreciated since – from Rs 25,000 psf in 2013 to Rs 27,500 psf now. Unity Group’s under-construction luxury project The Amaryllis Phase-1 and Phase-2, in New Delhi, has also received a good response.

Encouraged by the success of these projects, several developers have launched new luxury housing projects across Indian cities this year. Interestingly, these under-construction projects have also received a tremendous response from buyers.

Juneja Heights’ luxury housing project in Kolkata, launched in April this year, has already sold 79 per cent of the stock. Average rate of property in this project called Ospira is Rs 10,000 psf. Preeti Developers' villa-based project in Bengaluru has also sold 49 per cent of the units since its March 2019 launch.

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Among the many luxury housing projects that were launched this year are Kalpataru Group’s Imperia,Mumbai, Emaar group’s Digi Homes, Gurugram, Dasnac’s Burj Noida, Noida, Aparna Constructions’ One, Hyderabad and Baashyaam Constructions’ Poes Project ,Chennai. While Wadhwa Residency has launched its luxury project Pristine in Mumbai, Conscient Infrastructure and M3M India have also launched similar projects in Gurugram. The property rates range between Rs 9,000 psf to Rs 38,000 psf, in these projects.