2022 has been all about a return to normal following the devastating setback of the COVID-19 pandemic. Nations across the globe are witnessing an economic resurgence and a surge in demand for goods and services. The real estate sector, too, is experiencing a return to pre-pandemic levels of home buying behaviour, but in this context, Indians are charting a different course.
Many countries like the US, UK, and Canada are undergoing a real estate lull. People across the world are downsizing their living arrangements and going in for smaller houses. However, the luxury real estate segment in India is experiencing a boom. In 2022, the sale of luxury residential apartments doubled in the top 7 metro cities of the country as compared to 2019. This was the last year before the pandemic forced the sector to go on a back foot. 2023 promises a continuation of this trend.
In fact, the luxury residential segment is predicted to be the key growth driver for the sector this year.
A look at the demand
Before we examine the real estate market and the luxury housing segment's future outlook, let us examine the current trends. Who are the prospective homebuyers opting for upscale homes, and what drives them? The economic instability that had set in during the pandemic seems to have caused a deep impact. The equity markets are highly volatile, bullion at an all-time high, and debt markets staggering under the weight of policy changes. Real estate seems to be the only recession-proof investment at this time. Millennials and Gen Z, young professionals, and first-time buyers are now fuelling the demand for luxury residential apartments. With India emerging as a bright spot in an otherwise staggering global economy, HNIs and NRIs are also clamouring to invest in high-end real estate assets.
Why luxury housing?
Apart from investment woes and the need for a secure investment avenue, the younger generation has woken up to the need to put down roots and be part of a community. The work-from-home culture initiated to maintain social distancing during the pandemic has been quite advantageous both to corporations and to employees. The former saves on infrastructure, resources, and overheads while employees cut down on commute time and money, making for a better work-life balance. But this also means more room to work and teleconference. Young entrepreneurs and professionals now need a home office space to work out of and students to pursue their classes and training programs. This means larger residential units.
The need for walking/jogging tracks, health and fitness centres, yoga rooms, swimming pools, and community centres has become a priority for homeowners. Buyers are looking for projects that can offer them these and more. With a rise in environmental consciousness and sustainable living, buyers are also looking for green housing projects that allow for plenty of natural light and ventilation and for eco-friendly systems such as rainwater harvesting, waste management systems, and composting units in the project.
2023 and beyond
Experts believe that 2023 is the year the luxury housing segment will truly come of age. We are all set to see a huge influx of investment from HNI investors. So, apartments, villas, duplexes, and bungalows upwards of INR 1.5 crore are likely to be a favourite of home buyers. This also means that the top developers in major metro cities will look at the suburbs and upcoming neighbourhoods to build these spacious projects. Planned cities and neighbourhoods like Navi Mumbai will get a new lease on life with buyers looking for a second home or a profitable real estate investment. The infrastructural development, like the new Mumbai airport and the inauguration of the Mumbai Trans Harbour Link, will also help developers expand to these new suburbs.
We can expect these projects to feature more, better home automation systems research suggests that the home automation market in India is expected to grow from USD 3.6 billion to USD 8.6 billion in 2027. The current year will be a major stepping stone in this direction. In addition, more developers shall also be seen adopting eco-friendly green construction practices and employing ergonomic materials because luxury homeowners have smart and eco-friendly lifestyles high on their list of priorities.
What we expect to see this year are more luxury projects coming up in which developers have tied up with some of the top international project designers and interior decorators. Plush ready-to-move homes with all the trappings of aesthetic brilliance and a glamorous lifestyle – that is the prediction for the path ahead.
We must also take a look at the tech offerings that will power the real estate sector this year. More luxury home buyers will look for home-buying solutions online. Being a revolutionary online home-buying platform, we at Blox hope to be a part of this uptrend.
