Demand for luxury projects on rise in metropolitan cities

Real estate industry firms and brokerage firms said that improved discretionary income, rising compensations of CXO-level executives in IT firms and startups along with stable interest rate regime are driving the sales in the premium housing segment

Bengaluru: Demand for luxury housing is on a rise in all major cities including Bengaluru as wealthy individuals’ quest for owning bigger homes increase. Real estate industry firms and brokerage firms said that improved discretionary income, rising compensations of CXO-level executives in IT firms and startups along with stable interest rate regime are driving the sales in the premium housing segment.

According to a FICCI-ANAROCK Consumer Sentiment Survey, the highest homebuyer demand is now for 3BHKs, with at least 50 per cent respondents picking bigger sized homes.

Despite increasing property prices, the demand for bigger apartments continues to be increasing. Bigger homes or 3BHKs are particularly in vogue in Bengaluru, Chennai, Hyderabad, and Delhi-NCR, the survey report said.

Premium or luxury homes are those residential properties where the prices are pegged at Rs 1.5 crore or more.

“The real estate landscape witnessed a notable shift towards luxury housing, signifying a nuanced change in buyer preferences,” Raj Menda, Chairman of FICCI Real Estate Committee said.

In 2023, the sale of luxury realty properties surged to 112 per cent as compared to 2022.

According to industry experts, the appeal of owning a villa has intensified in the metro cities like Delhi-NCR, Mumbai-MMR, Hyderabad, and Bangalore, leading to a rising demand for these luxury properties.

“Not only, buyers’ budgets have expanded, with not-only High-Net-Worth Individuals (HNIs) and Ultra High Net Worth Individuals (UHNIs) increasingly considering real estate as a crucial long-term hedge against inflation, but even upper and upper middle class expanding their budgets to get bigger and more premium apartments," Proptech firm, NoBroker has said.

In a report, the company has found out that the demand for villas in Bengaluru has witnessed a 32 per cent jump in recent years as compared to pre-Covid ones.

Sarjapur and Devanahalli in Bengaluru have emerged as the most favourite places where many such projects are coming up.

“In all major metro cities, wealth creation is happening at a rapid pace. Professionals in new economy sectors like information technology, venture capital, social media, and start-ups, are earning salaries that are comparable to compensation in some developed countries. So, a new class of wealthy individuals with significant purchasing power have emerged in India. In a city like Bengaluru, the buyers of many luxury projects belong to this new class,” a Bengaluru-based real estate expert revealed.

He also pointed out that these luxury homes are most of the times the second or third homes of buyers. “This segment is immune to inflation and price rise as top level earnings are not getting impacted much due to such factors. That is the reason, we see many launches in premium category in Bengaluru,” the person said. Companies like Puravankara, Prestige Developers, Brigade Enterprises, Sobha Ltd, RMZ Corp and Embassy Groupamong others have come up with luxury project launches in Bengaluru.