Luxury housing is emerging as one of the vibrant and dynamic real estate segments in India. Rapid pace of urbanisation, influx of global lifestyle, surge in NRI demand and fast growing service industries nudging middle income groups into HNIs bracket are instrumental in driving the demand for luxury housing.
According to Jones Lang LaSalle’s survey, the difference in the cost of construction between a mid-end/high-end apartment and a luxury apartment is less compared to the premium that can be obtained on sale of such properties. It is 30-40 per cent more expensive to build a luxury residential project as compared to a mid-end/high-end project, while the sale price of a luxury project is 60-80 per cent higher. This price depends on the location and varies from city to city, as luxury residential projects can have higher risks and longer gestation period compared to mid-end/high-end projects.
Around 200 luxury residential projects were launched between 2008 and third quarter 2012 across India’s top seven cities. Following the global financial crisis, the value of new luxury residential projects peaked at US $9.9 billion in 2010. However, the value fell to US $4.7 billion year-to-date due to developers being more focused on completing existing projects.
Among the cities, Delhi-NCR, Mumbai, Bangalore and Chennai had the greatest market share of these launches. While Bangalore had 21 per cent of share during the first three quarters of this year, Chennai had 20 per cent. While Mumbai has been affected by global meltdown, Bangalore and Chennai markets are quite stable and growing significantly in the luxury housing domain, says NS Srinivasa Reddy, Assistant Vice-President, Research & REIS, Jones Lang LaSalle.
In Chennai, Akshaya has recently launched an ultra-luxury smart home project which is considered the tallest tower in the state on Kazhipattur road, OMR. The project which drew encouraging response from HNIs and with 133 meters comprising 38 floors, 31 homes and 32 swimming pools of 6700 sq ft, each floor will have a deck of 360° view and sea view. Real Value Promoters is planning to launch an ultra-luxury housing project in the city and giving final touches to the unique project. The project is being developed by an international architect with ultra luxury products being imported from the European countries and integration of amenities hitherto unheard of in luxury housing projects. With the increase in globetrotting Indians and those accustomed to living a lifestyle during their sojourn abroad, luxury housing is increasingly sought after by affluent people, say industry sources.
V Nagarajan, Property Consultant