In a survey conducted by Sotheby’s International Realty, it was found that the luxury residential real estate may take a big leap this year with 67% of the HNIs planning to buy a luxury residential home among which a higher number (29%) showed the desire to acquire a Holiday home. The survey analyzed the buying pattern of more than 200 HNIs and UHNIs from the top 8 cities of the country including Delhi-NCR, Mumbai, Kolkata, Bengaluru, Hyderabad, Pune, Chennai and Goa. A report by SURFACES REPORTER (SR).
Luxury Residential- the latest hotspot
It is said that ‘There is never a slowdown in luxury purchases’. Proving the statement true, the recent survey by the Indian subsidiary of the notable Sotheby’s International Realty (SIR) from the Sotheby’s Auction House noted a significant increase in the realty buying pattern of HNIs and UHNIs since the onset of the pandemic.
According to the survey, the last 18 months of Pandemic saw more than 14th of the high net-worth luxury home buyers did buy real estate by Dec 2021 which led to a surge in luxury home off take across the cities.
The major reasons being cited for the same are historic low home loan rates and govt incentives like the waiver of stamp duty in Mumbai and circle rate rebate in Delhi that accelerated the transactions. Among 46% of these buyers were looking for a Lifestyle Upgrade and a good investment opportunity which was not the case earlier as then most HNIs used to buy luxury homes for self use.
Notable Purchases of 2021
Some of the most notable purchases that happened in the year 2021 were a whopping Rs 1001 cr spending of Radhakrishna Damani, Founder of DMART for a Malabar Hill Bunglow. Another notable purchase was made by K Raheja Promoters who shelled out INR 427 crore for Raheja Artesia.
Expected big Jump
The survey noted that almost 76% of the respondents are looking to buy real estate in the coming two years which would significantly impact the luxury realty market of the country. Almost 86% of them also mentioned that they would look to buy Residential Real Estate vis a vis 11% who opted for commercial real estate which would also mean a big jump in the luxury residential real estate.
For the sake, the HNIs are ready to shell out Rs 10-25 cr for a luxury city apartment or Villa. Almost 10% people also expressed the demand for Uber Luxury Homes that fell in the category for more than Rs 25 crore.
Desire to buy a Holiday Home surges
According to the survey, more than 1/4th of the respondents (29%) also showed the desire to acquire a holiday home. This remains one of the biggest aspirations for the HNIs, a major deviation from the earlier pattern where not more than 5-6% of the HNI clientele was searching actively for a holiday home.
Almost 71% of the respondents are ready to shell almost Rs 5-10 crore for the same while 29% are willing to spend more INR 10 crore for the right vacation home.
Important features of the desired luxury properties
A significant increase is noted in the demand for 'reconnecting with nature' among the luxury home buyers. Other amenities that would entice them to buy a property include 'Smart Amenities' where technology is taking the centerstage in home buying decision. The demand for sustainable homes was seen during the survey but it is still not a priority for a luxury home buyer.
WHF the biggest motivator for luxury home upgrade
While almost 28% of the HNIs had gone back to the office - full time, prior to the third wave of COVID almost half of the respondents though, continue to be in a “hybrid” work mode, spending anywhere between 1-4 days working from home. Among them almost, 65% respondents answered, they do not see themselves going back to the physical office, all 5 days of the week. The above is a clear indication that the desire to upgrade homes, will remain a big motivator in 2022.
“The fact that people picked “a good investment opportunity, as a strong reason for buying luxury real estate points to a bullish outlook on luxury home prices. Unlike some of the developed countries, where the price increase frenzy seems to be cooling off, in India, I believe, we are at the start of a secular price rise. We expect low-rise homes in the thriving urban centers, especially in Delhi NCR and Mumbai, and the vacation home destination of Goa, to be the outperformers of 2022," Amit Goyal, CEO, India Sotheby's International Realty said.
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