Indians are rushing to buy luxury properties

Luxury real estate is witnessing a significant surge in demand across key metro cities in India.

Luxury real estate is witnessing a significant surge in demand across key metro cities in India.

According to a report by the Anarock Group, out of the total 365,000 units sold in the top seven cities in 2022, approximately 18 per cent (approx. 65,680 units) fall under the luxury category.

In contrast, in 2019, only 7 per cent (approx. 17,740 units) of the total 261,000 units sold belonged to the luxury segment.

These upscale residences are usually synonymous with branded developments, prime neighbourhoods, exclusive amenities, global services, and cutting-edge conveniences.

The upward swing in demand can be attributed to several factors:

Strong economic growth: Expansion of the Indian economy and emergence of diverse business models, including tech, venture capital, social media, and start-ups, resulting in a new set of wealthy individuals with substantial purchasing power.

Higher investment in lifestyle: The desire of these affluent buyers to invest in their lifestyle today is driven by a strong aspirational value for home ownership, larger living spaces, and the appeal of second homes.

HNIs and UHNIs: High Net Worth Individuals (HNIs) and Ultra-High Net Worth Individuals (UHNIs) view real estate as an essential hedge against inflation in the long run.

The increase in raw material prices, such as steel and cement, suggests that property prices are expected to rise in the near future, making it an opportune time to invest.

Increased NRI demand: Increased demand from the Non-Resident Indian (NRI) segment due to the strengthening of the US Dollar against the Indian Rupee.

Capital gains cap: The government's decision to cap capital gains at 10 crores (as announced in the Union Budget) may also be a contributing factor.

Moreover, real estate continues to be one of the strongest sources of generational wealth. As a result, Delhi-NCR, Mumbai-MMR, Hyderabad, Pune, and Bangalore have witnessed the highest demand for high-end units among metro cities, with MMR and NCR accounting for more than 50 per cent of the total sales share.