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The Indian luxury residential real estate market is anticipated to register a CAGR of more than 5% in the forecast period.
A pick-up in luxury real estate has been the silver lining of the COVID - 19 pandemic crisis. The COVID - 19 pandemic has created convergence between "luxury real estate" and "quality of life." As per an industry study, it is stated that a 40 percent growth is expected in revenue for this market during the forecast period as demand for ultra-luxury homes priced above INR 5 crore has improved, spurred by changing needs during the pandemic.
For the year 2022, Luxury Residential Real Estate Market In India is expected to be a buyer's market as COVID-19 expands and escalates the want of having a shelter where they don't just feel protected but also experience the best luxury too. The demand for luxury residential is increasing in India because of the consumer trend that desires a home experience that is larger than life in terms of everything.
The luxury residential real estate market in India has been growing over the years, making the developers introduce ready-to-move-in luxury condominiums that offer a wholesome lifestyle coupled with best-in-class services and notable architecture supporting the buyers' vision of modern and luxurious living.
Right from bespoke experiences, multi-functional spaces, amenities, and safety systems to strategic high-end locations. With the work-from-home phenomena among buyers, there has been a robust demand for high-priced properties that can serve as catch-all compounds, live-work spaces, and offer a resort-like living experience, catching the attention of luxury residential real estate developers.
Scope of the Report
Luxury residential real estate refers to properties that are exclusively designed for human occupation, which provide charmed and resort life with high-end amenities. The Indian luxury residential real estate market is segmented by type (villas and landed houses, apartments, and condominiums) and by cities (New Delhi, Mumbai, Bengaluru, Kolkata, Chennai, and Other Cities ). The report offers market size and forecasts in value (USD billion) for all the above-mentioned segments.
|Villas and Landed Houses|
|Apartments and Condominiums|
Key Market Trends
Reduction In Interest Rates and Stamp Duty Has Spurred The Residential Sales
Interest rates for housing loans have been at historic low rates since 2021, with premier lending institutions offering attractive home loan options in the range of 6.75% to 7.5%. Home loans at prevalent interest rates allow for considerable savings while creating an asset for the purpose of end-use or investment. In fact, a lower interest rate provides borrowers with an option to raise the loan amount, helping broaden their choice for a more luxurious property, inclusive of finer amenities and lifestyle facilities in premium neighborhoods.
Interest rates impact the price and demand of real estate — lower rates bring in more buyers, reflecting the lower cost of getting a mortgage, but also expand the demand for real estate, which can then drive up prices. Real estate prices often follow the cycles of the economy, but investors can mitigate this risk by buying REITs, or other diversified holdings that are either not tied to economic cycles or that can withstand downturns. Government policies and legislation, including tax incentives, deductions, and subsidies, can boost or hinder demand for real estate.
The big pickup in Mumbai's luxury residential real estate has also been spurred by a stamp duty cut in Maharashtra to 3% till March 31, 2021. In a recent address, Minister for Housing and Urban Affairs has urged other states to follow suit. Low-interest rates coupled with lower stamp duty could keep sales buoyant in the near future.
In India, interest rate decisions are taken by the Reserve Bank of India's Central Board of Directors. The Reserve Bank of India kept its benchmark repo rate at a record low of 4 percent. However, in May 2022, India's central bank raised the benchmark interest rate for the first time in two years in an attempt to rein in high consumer prices. The Reserve Bank of India (RBI) raised the repo rate - at which it lends money to commercial banks - by 40 basis points to 4.4%. The rate had been reduced to a record low of 4% during the Covid-19 pandemic.
These lower interest rates and stamp duty rates in India have accelerated the luxury residential real estate market in India.
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Rise in Smart Home Market Is Expected To Drive The Market
Smart homes use connected devices and appliances to perform actions, tasks, and automated routines to save money, time, and energy. Home automation systems allow for the integration of various smart devices and appliances controlled through a centralized system. The growth of smart homes is primarily driven by factors such as perpetually growing internet users, increased adoption of smart devices, awareness of fit and healthy lifestyles, and a rising sense of home safety and security.
According to the data from Statista, The Revenue in the Smart Home market in India is expected to register a CAGR of 12.90% (2022 - 2026), resulting in a projected market volume of USD 8,390 million by 2026. In the Smart Home market, the number of active households is expected to amount to 54.0m users by 2026.
The share of smart home users in India was larger among cities like Mumbai, Bengaluru, and Kolkata. In the year 2021, a share of 39.4% of users is in the high-income group, and a share of 25.9% of users are 25-34 years old in India. In India's smart home market, the number of active households is expected to amount to 1.7m users by 2026. Household penetration will be 36.9% in 2022 and is expected to hit 61.3% by 2026.
India's luxury residential real estate market is competitive with the presence of private and government players. The Indian luxury residential Real estate market can be defined as a semi-consolidated market. Some of the top players in this market are Indiabulls Real Estate, Oberoi Realty, Brigade group, Godrej properties, and Oxame. The growing presence of international funds and foreign capital is increasingly attracting domestic developers to have joint ventures as a way of gaining a foothold in the country and enhancing their financial strength and management expertise.
Post the pandemic, the luxury housing market has reported significant traction; buyers are responding favorably to residential purchases across segments as sale prices have corrected in the last few quarters, making real estate investment attractive, especially in the premium segment.
- On 31 March 2021, Sunteck Realty announced that the company entered into a joint venture with the local landlords of Mumbai for a 7-acre plot in Mumbai's Borivali suburb. This joint venture is developed to plot into a luxury residential project. The land parcel is expected to have a total development potential of 1 million sq ft that can be with estimated revenue of INR 1,750 crores. Through this joint venture, the company is planning to develop this into a super-premium luxury residential project.
- In Q1 2022, DLF Ltd, one of India's largest listed real estate companies, announced sales worth Rs 1,500 crore from the first phase of its highly anticipated luxury residential project in New Delhi, ONE Midtown.
Table of Contents
1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Overview
4.2 Market Dynamics
4.2.1 Market Drivers
4.2.2 Market Restraints
4.2.3 Market Opportunities
4.3 Insights into Technological Innovation in the Luxary Residential Real Estate Sector
4.4 Government Regulations and Initiatives
4.5 Value Chain / Supply Chain Analysis
4.6 Porters 5 Force Analysis
4.6.1 Threat of New Entrants
4.6.2 Bargaining Power of Buyers/Consumers
4.6.3 Bargaining Power of Suppliers
4.6.4 Threat of Substitute Products
4.6.5 Intensity of Competitive Rivalry
4.7 Impact of COVID-19 on the Market
5. MARKET SEGMENTATION
5.1 By Type
5.1.1 Villas and Landed Houses
5.1.2 Apartments and Condominiums
5.2 By Cities
5.2.1 New delhi
5.2.6 Other Cities
6. COMPETITIVE LANDSCAPE
*List Not Exhaustive
6.1 Overview (Market Concentration and Major Players)
6.2 Company Profiles
6.2.1 Indiabulls Real Estate
6.2.2 Oberoi Realty
6.2.3 Godrej properties
6.2.4 Brigade Group
6.2.6 Sunteck Realty
6.2.7 The Pheonix Mills
6.2.8 Mahindra Lifespaces
6.2.9 Lodha Group
6.2.10 Prestige Group
6.2.11 Sotheby's International Reality
6.2.12 DLF India
6.2.13 Panchshil Realty*
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
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Frequently Asked Questions
What is the study period of this market?
The india luxury residential real estate market market is studied from 2022 - 2027.
What is the growth rate of india luxury residential real estate market?
The india luxury residential real estate market is growing at a CAGR of >5% over the next 5 years.
Who are the key players in india luxury residential real estate market?
Indiabulls Real Estate, Oberoi Realty, Brigade group, Godrej properties, Omaxe are the major companies operating in india luxury residential real estate market.