THRIVING LUXURY SEGMENT

Also,owing to the heavy discounts offered by developers as well as dealers,the selling of luxury homes have been on the rise. “Metropolitan cities like Mumbai and Delhi have been witnessing consistent selling off of luxury complexes including standalone villas and high-rise luxury apartments,” cites Chopra.

Emphasising the presence of buyers rising steadily in this segment,Navneet Chak,regional director of Sobha Group,describes,“In reality,there has been no hold back in demand for the Rs 1 crore-plus homes as people who can manage to pay for these homes are the well-heeled,who are not influenced by inflation or high interest rates.”

He says that the demand in this segment is largely contributed by rising income levels of top management of corporates and affordable interest rates on mortgages. NRIs,corporate heads,high networth individuals (HNIs),expatriates and celebrities form some of the standard customers of this luxury housing segment.

A study denotes that the total wealth of HNIs in the Asia-Pacific region is expected to reach $13.9 trillion by 2012,with an annual growth rate of over 8 per cent,which will replace Europe as the second largest regional depository of HNI wealth. The number of millionaires in India has already grown up to approximately 1.45 million in the year 2008.

THE DRIVE FOR LUXURY HOUSING

Sanjay Verma,executive director of Cushman & Wakefield,insists,“In the last two years there has definitely been a shift in how luxury segment is viewed by developers. Its attractiveness was largely driven by high margins and good investor demand for a premium product. With the change in economic conditions most of the end users are focusing on controlling costs and getting high value for their money.”

However,he cautions that the developers need to provide ample proof of the final quality and value to customers before they can charge a premium. “Given the fact that greater part of demand supply gap is in the affordable and budget category of housing,we may see more developers making luxury segment a big part of their future plans,” he asserts.

With one more notable and imposing than the next,these luxury developments shows off facilities and services that are extraordinary and elite. Fascinatingly,one will be amazed to observe that the demand for these luxury houses has really been unaltered even with the global financial meltdown.

DELINEATING LUXURY SEGMENT

Sushanto Roy,Head- Infrastructure and Housing,Sahara Prime City,says,“With the evolution of the real estate industry,various parameters are in the process of being reformulated. What was considered luxury before has now become necessity. Aspirations for a better lifestyle,penchant for the best,increased exposure to world class standards,enhanced income levels all have led to the need of reviewing of various segments including luxury segment as well.”

“Considering the present scenario,there is a possibility that some of the people belonging to the luxury segment may have redefined their priorities. Hence the developers need to redefine the luxury segment,” he asserts.

Creating individuality in housing with all rare services is what makes a property a luxury one. Several developers are making its mark in luxury segment. Rajeev Rai,VP (Corporate),Assotech Limited,advises,“If you want your buyers to truly understand luxury,you have to redefine their ultimate style of living. Property should not only be ultimate in luxury,but also ultimate in sustainability. The hip and cool property should protect and caress individuality of the elite buyer.”

HOW BIG IS THE MARKET?

The segment has been sizeable in metropolitan cities and the commercial hubs as they are advanced,progressive and have standards higher as compared to other cities. The end user driven demand existed in this segment and it still continues to be there despite the recession.

However,in some tiny pockets the demand has been calm as some investors who invested in the high end luxurious properties merely for appreciation and some who are staying abroad,explains Roy.

The majority takers of these houses are the growing HNIs. As per the estimates,the Indian luxury market is estimated at around $4 billion,which could go up to $30 billion by 2015. “India has the second-highest growth rate in HNI globally with a 20.5 per cent increase in the number of HNIs and is currently pegged at around one and a half lakh. Realtors who lead innovation,always buck the recessionary trend in luxury housing,” expresses Rai of Assotech.

FACTORS PROPELLING THE GROWTH

With banks going all out in providing loans the high income group clients,the demand for luxury housing is on the rise.

According to RR Nair,CEO of LIC Housing Finance,“The segment is much defined in terms of buyers as it is catering to the HNI customers. The growth in last year for loan above Rs 1 crore has been phenomenal in all standards and in terms of rise year-on-year basis.”

The demand is also escalating as some developers are offering discounts to the tune of 10 to 15 per cent for the properties above Rs 1 crore and above.

Also,since the buyer conversion rate (BCR) is considerably high in this segment,the developers have started counting on luxury home buyers as their best gamble to bail them out of their cash crunch in today’s scenario. l

praveen.singh@expressindia.com