Luxury and importance of location

MUMBAI AND DELHI

Mumbai and Delhi are currently the only cities with a real and sustainable demand for genuine luxury housing. In other cities,HNIs tend to buy land and build their own extravagant residences,but this does not fall under the purview of luxury home development. As of now,the luxury housing market in Tier 2-3 cities is insignificant in market terms.

In terms of both pricing and quality of offerings,Mumbai’s luxury home market certainly holds its own with these cities – and even surpasses some of them. In Delhi,residential colonies can be classified according to their geographical placement and prestige,which is gauged by the inhabitants of the area. By that coin,the city’s elite – comprising of politicians,bureaucrats and wealthy business families,restrict themselves to Lutyen’s Zone,central and South Delhi. Even there,supply is now extremely limited. One of the last premium offerings now available in the Lutyen’s Zone is at Kasturba Gandhi Marg.

CURRENT TRENDS

Location continues to be the key factor for luxury housing in India. This creates considerable and focused demand for luxury housing in certain areas,leading to scarcity of available supply in geographically limited cities like Mumbai. The supply that exists in high-profile locations such as South Mumbai tends to be held by institutions rather than individuals,who release their holdings at certain times.

Interestingly,luxury projects in India are now going vertical. While this is a function of the city and micromarket rather than of the popularity of a configuration (for instance,in Delhi’s Lutyen’s Zone,bungalows are the only option) going vertical is the only option in cities like Mumbai. High rise luxury projects optimize the limited space available,and also bring with them a sense of modernity; therefore,they wield their own kind of aspirational value.

INFRASTRUCTURE CONCERN

There are issues that will need to be addressed in terms of infrastructure. Unlike in developed countries,enforcing strict norms with regards to structural safety,disaster,environment and fire safety in high rises presents quite a challenge in India. If we take the intense urban sprawl of financial capital of Mumbai as a reference point,it becomes evident that such parameters cannot be over-emphasized. The same can be said for other large cities. Apart from the fact that support infrastructure is a huge challenge in most cities,we do not have the benefit of facilities such a helicopter evacuation in India.

Another factor affecting the increase of high-rise buildings in India are the FAR norms. FAR parameters vary from state to state and are governed by the respective city development authorities. Allowing high-rises indiscriminately in certain city areas is definitely asking for trouble,and will result in an infrastructure deadlock and eventual fall in prices. l

The author is vice president (homebay residential) Jones Lang LeSalle.