Luxury real estate demand set to rise: Developers
New Delhi, March 24 (IANS) The luxury real estate segment with a customer base of its own did not witness a slowdown as significant as in the mid-level properties in the last few years and with the latest cut in GST rate, developers say, demand will pick up from here on.The major factors for a customer of luxury apartments, realty players say, are the location, amenities, the niche provided and so on, rather than the price as the buyers are mostly the affluent people.The problem of huge unsold inventory, noticed in the mid-level properties, is not witnessed in the luxury segment, which can also be attributed to the limited quantity of construction in the high-end segment.
Developers say that although there was a slowdown of demand during the last few months for under-construction properties, including the high-end market, owing to the wait and anticipating cuts in Goods and Services Tax (GST) from 12 per cent, now, after the rate cut, the interest is seen returning."People stopped buying for a very short term, looking for a clarification on GST and that is the only reason why the demand was low and since now the clarification has come and rates are reduced, it has been a booster to the luxury demand," said Pankaj Bansal, Director M3M, makers of the Trump Towers in Gurugram, told IANS.According to Abhishek Kulkarni, Chairman of Pune-based Million SqFt Realty, the demand for high-end property has been steadily rising as such properties are built in the metros where multinational companies have entered and businesses have grown in the past few years, leading to a sustained demand from the well off.Lot of the buyers in the segment actually purchase properties to invest or park their funds with an aim to liquidate the property in future and that very trend of investing in high-end property has of late increased among Indians, market participants said.Bansal from M3M said: "A luxury property creates a much higher incremental value in comparison to a product in the mid-segment. For example, if price in the mid-segment grows from Rs 5,000 to Rs 8,000 per square feet over the period of 5 years, during the same period, the price of a luxury property would have risen from Rs 15,000 per square feet to Rs 25,000-30,000 per square feet."In terms of investment, the domestic luxury realty market is also a favoured destination for the Non-Resident Indian (NRIs). Around 35 per cent of the investment is done by NRIs, said Paritosh Kashyap of 360 Realtors."Apart for NRIs, there are lot of local people, politicians, businessmen, who have bought luxury property primarily for investment purposes," he added.Experts also noted that the transparency brought in by the Real Estate Regulatory Act (RERA) and the GST has helped the sector including the high-end segment.Demand in the segment is rising currently, according to a spokesperson with DLF said. "The luxury segment is growing, people are now well-travelled and aware of what is available. They have been experiencing luxury living across the world," he said.Price in the DLF's high-end King's Court property in Delhi ranges from Rs 35,000-50,000 per square feet currently.According to R.K. Arora, Chairman Supertech Ltd, the top market for luxury homes in India currently is Mumbai where project prices range between Rs 30 crore and Rs 100 crore, followed by Delhi where luxury property prices are between Rs 20 crore and Rs 70 crore."Driven by the huge start-up and private equity investments, luxury housing in Bengaluru comes with a ticket price. upwards of Rs 10 crore while Pune is almost at par with luxury properties at Rs 15 crore," Arora said.The price range in Supernova, a luxury project by Supertech in Nodia, ranges from Rs 8,000 to Rs 10,000 per square feet.