B’luru luxe realty sees traction with a host of new launches
Rapid wealth creation, dearth of supply and tax provisions in this year’s Union Budget are driving the current trend
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Bengaluru Luxury residential market is on a roll. While rising interest rates have dented sentiment in the midand affordable housing segments,demand for premium properties is showing no signs of exhaustion. Rather, industry experts and officials are of the view that the momentum is likely to continue in 2023.
No wonder, the focus ofc developers has now shifted from affordable housing segments towards luxury housing. Several launches have been done in recent months with many on the pipeline. Factors like rapid wealth creation, dearth of supply and tax provisions in this year’s Union Budget are driving the current trend.
“As the interest rate moves up, albeit at a nominal pace, it is still anticipated that the demand of luxury housing shall remain buoyant as the per capita earnings have increased significantly to Rs 1.72 lakh currently from Rs 86,600 in 2015. It is anticipated that luxury housing will soon become the new normal as the buyers are more discerning and demand better lifestyle and comforts,” Anuj Puri, Chairman of Anarock Group told the Bizz Buzz.
Housing properties worth more than Rs 1.5 crore are usually considered as luxury properties. The demand towards premium properties can be corelated with the high GDP growth of Indian economy in past years. The pace has only increased post the pandemic.
According to data collated by real estate consultancy firm CBRE, India’s luxury housing sales rose a whopping 151 per cent year-on-year (YoY) during January-March period of 2023. Cities like Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Pune, and Kolkata witnessed maximum traction for high-end properties.
Not only in the recent quarters, uptick in demand for premium properties is on a rise for quite some time now. According to real estate consultancy firm Anarock,the share of luxury segment in the total launches have improved significantly from about 11 per cent in 2019 to 18 per cent in 2022. The share of sales withing the luxury segment has also changed over the same period. In 2019, sales of luxury housing would constitute only 7 per cent of the total sales, which increased to 18 per cent in 2022, indicating a supply-demand equilibrium.
Bengaluru market trend:
Bengaluru has been at the forefront of luxury residential market. After Mumbai and Delhi-NCR, the Silicon Valley of India has been seen the maximum demand for premium properties. Being the IT and startup capital of India, this southern city has seen very high pace of wealth creation among white collar professionals, and entrepreneurs across sectors.
“We see demand for luxury homes, apart from buyers of first homes. Especially, villas,luxury homes, in our experience, have seen demand uptick. Such properties, whichis usually the second homes, are experiencing good demand. There is alsoacceptance of higher prices for these units. For instance, we launched a project inthis segment, where we had hiked prices and we used to see sales happening inthose increased prices. So, people are willing to pay for premium products andlocations. Villas across the cities in the peripheral areas have done well. Demandremains strong for premium properties,” Bengaluru-headquartered Vaishnavi Group’s Director, Darshan Govindaraju told the Bizz Buzz in an interaction. Not only Vaishnavi Group, another city-based developer Century Real Estate has been witnessing robust response towards its luxury projects. One of its projects in Hebbal ‘Century Ethos’ has seen some brisk sales on the back of strong home buyers’ interest. Similarly, other marquee developers including Sobha Ltd, Prestige Group, Brigade Group, & Puravankara Ltd among others are also witnessing encouraging signs of demand, leading to multiple launches in this space.
“It is anticipated that the launches and sales in 2023 are likely to exceed the levels of 2022 but the growth rate may be a few notches lower. Since the share of affordable housing is reducing due to the rising input costs, it is quite certain that the luxury and mid-end segments will gain some share. The major markets may witness increased launches of luxury residential projects,” Puri, Chairman of Anarock Group said.
Though Bengaluru remains a key market in premium properties segment, a slowdown in the technology sector coupled with low pay hikes for the senior management remain a key risk to the growth of luxury residential market in coming quarters. But for now, discerning home buyers with disposable incomes are shrugging off those concerns.
