The luxury real estate market will boom from 2022 to 23
The luxury real estate market will boom
While the coronavirus pandemic has slowed down the investment spree of high-net-worth individuals (HNIs) a bit, the reopening of property markets has fueled the interest of the uber-rich in the luxury real estate sector.
According to a recent survey, HNIs and ultra-rich investors are very keen to invest in the property market, especially in the property segment above Rs 5 crore including the luxury real estate sector.
If the duration of the coronavirus crisis is considered, the wealthy investor class was investing in luxury real estate mostly for personal use and not for appreciation/ROI purposes.
Due to the uncertain timing, it made sense not to experiment. However, with the economy slowly opening up, the ultra-rich are again bullish on investing in luxury properties.
If the metro cities of Delhi and Mumbai are taken as a sample, then in the year 2021, there were many property deals worth more than 100 crores. Being the national capital, Delhi has been the most preferred destination for the uber-rich. In the year 2021, several deals worth up to Rs 1000 crore were registered in the capital.
Areas like Lutyens’ Zone, Vasant Vihar, and South Delhi remained hot spots of luxury real estate. Experts believe that the same trend will continue in the coming year as well.
Mumbai’s commercial capital is equally favored by the ultra-rich. In this case, the short-term stamp duty waiver announced in the wake of the coronavirus crisis played a major catalyst for high-end property transactions. High net worth individuals ( HNIs used this opportunity and saved a significant amount in stamp duty.
Experts are of the opinion that high-value investors who are constantly on the lookout for high-end properties, go only for branded and established developers with a proven track record. This is understandable as investors don’t want to.” Are you getting into any trouble due to procedural lapses on the part of the developers.
One segment of High Net Worth Individuals (HNIs) that contributed significantly to the growth of the luxury market is the Non-Resident Indians (NRIs). While the pace of investment from the ex-pat community slowed down during the pandemic period, NRIs were as always eager to invest in high-value properties of established markets.
Moreover, the depreciating rupee is a boon for NRI investors as they can buy high-quality properties with comparatively less investment.
It has been observed that NRIs are also preferring to invest in large land parcels on the outskirts of metro cities. The periphery of cities like Delhi, Gurgaon, Noida, Pune, and Bangalore has seen many such investments in the recent past.
Also, one of the key trends observed in the luxury property market is the affinity of investors toward the commercial segment. There are commercial showrooms in metro cities and office spaces in upmarket locations.
Due to the slowdown induced by the coronavirus pandemic, the price range was not that high and luxury investors did not hesitate to capitalize on such opportunities. Experts believe that due to supply chain issues due to the pandemic, the supply of high-end luxury properties may take some time, but the market is reviving and fencing is not ready to wait anymore.
Luxury market investors are taking advantage of low-interest rates and credit to invest in high-value assets. Low returns in traditional investment instruments such as gold, fixed deposits, and equity markets give luxury investors a chance to look for luxury. Look at is the leading real estate market.
One trend that will rule the luxury market is the preference for ready-to-move-in properties. Luxury real estate investors shy away from believing the promises of under-construction properties and want immediate possession. In short, as the real estate market is positive of revival and a strong recovery in the year 2022-23, the luxury real estate market will naturally pick up and aid the overall real estate recovery cycle.