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Luxury housing that involved unaccounted money in transactions was hit the maximum by demonetisation.

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Vinod Behl

Luxury housing that involved unaccounted money in transactions was hit the maximum by  demonetisation. But as green shoots of revival are visible in residential real estate, luxury housing is also evincing a renewed interest from buyers. According to market watchers, the housing market revival that started slowly in 2018, is expected to pick up pace by the end of this year.

Last year many major cities saw supply of around 12,090 units in the luxury segment with maximum supply of 6,310 units in MMR, followed by NCR (2,650 units), Hyderabad (1,585 units) Kolkata (160 units) and Pune (100 units). The share of unsold inventory of luxury homes in the overall residential inventory was just 12 per cent in Q3 2018, pointing to the absorption of luxury homes.

The fairly good absorption of luxury and ultra luxury homes by DLF, a major player in this segment, too, points to the fact that luxury housing is in a revival mode. DLF, which has a ready residential inventory worth Rs 12,300 crore, has  clocked Rs 600 crore worth sale of luxury homes each quarter in the current financial year. It had achieved a sale of Rs 1790 crore in the first three quarters of 2018-2019 FY. And the company is confident of achieving its guidance sale target of Rs 2250 crore for FY 19.

Anshuman Magazine, Chairman & CEO India, South East Asia, Middle East & Africa foresees strengthening of residential real estate, including luxury housing on the heels of rising consumer and investor confidence due to various positive policy initiatives of the government. He believes that though a luxury home buyer is more concerned about quality, builder profile and delivery timeline, yet with GST rate cut, luxury projects will see better traction.

Key real estate reforms of RERA and GST are proving to be major influencing factors for HNIs and NRIs. As Dhiraj Jain, Director, Mahagun Group which has Mirabella & Mezzaria luxury home projects in Noida, besides Montage in Ghaziabad, puts it, “Luxury home market had been subdued since 2013 and saw a major decline in 2017 with supply declining by 49 per cent. However, reforms have revived the interest of NRIs and HNIs in Delhi NCR, MMR, Pune, Kolkata and Hyderabad markets. But Delhi NCR & MMR markets will be at the forefront of reviving luxury housing”. Deepak Kapoor, Director Gulshan Homz, adds, “Looking at supply dynamics and demographics, Delhi NCR and MMR will see maximum traction as these regions had second largest supply in this segment”.

Sanjay Dutt, Managing Director, Tata Housing, which is into affordable as well as luxury housing segments firmly believes that considering the market trends and indicators, luxury housing will witness an improved share in terms of value in the coming years.

Chetan D Narain, CEO, Narain’s Corporation that markets luxury properties, foresees price correction to drive luxury housing. “For the past two years, the demand on both rental and ownership front has been sluggish. For a most premium apartment in Juhu Mumbai, ultimately after a wait of 18 months I had to settle for Rs 13 crore for which I was quoting Rs 17 crore. Rentals, too, have seen a correction of 10-12 per cent. I see further correction of at least 30 per cent in prices”.

Nibhrant Shah, CEO, Isprava luxury brand and operating in Goa, Alibaug and Coonoor markets says that luxury market will have good prospects provided developers listen to what market needs. The emerging segment of affordable premium/luxury homes also dubbed as mid-segment luxury segment has also been a significant contributor in the revival of luxury housing market. Pointing to this trend, Tanuj Shori, Co-Funder & CEO, Square Yards, says that in line with this distinct trend, premium housing unit sizes have already shrunk between 12-16 per cent in metros as new-age buyers value location over unit size. Anshuman Magazine adds that the growing trend of affordable luxury, is expected to further compel developers to realign their offerings according to customer needs.

With developers offering deals and discounts on luxury homes and experts expecting it to remain buyers market for another couple of years, luxury housing revival seems very much on the cards. Little wonder then that Sotheby’s International, the world leaders in luxury homes marketing have already positioned themselves well to reap the benefits. As Julie Leonhardt La Torre, COO, Sotheby’s International puts it, “We are here to meet the unmet pent up demand and needs of aspirational homeseekers who want luxury experience at affordable prices”.

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