The pandemic had led to the fall of several industries, not just in India but globally. The real estate sector was also affected by the pandemic as the demand and supply fell due to uncertainty in jobs, reverse migration of labourers, lockdown imposed restrictions, etc. Despite all this, the luxurious residential real estate was unaffected by the pandemic as there was an increase in demand from NRIs due to a plethora of reasons. The last few months have been reported as the best time to invest in luxurious properties.
Demand for Luxurious Homes Pre and Post Covid
The consumer surveys conducted in the pre-Covid era (H2 2019) have shown an increased demand for properties belonging to the mid-segment and affordable homes. The demand for luxurious properties was recorded at a rate of 41% by the second half of 2019. However, the consumer survey conducted by a leading investment platform has recently shown an increase in the demand for luxurious properties by 73% as the NRI population preferred to purchase properties belonging to Rs’ price range. 90 Lakhs to Rs. 2.5 crore. 3 or 4 BHK have been topping the wish-list recently as well.
Reasons for the increase in demand
The reports provide that the Covid 19 pandemic has seen an increase in NRI’s emotional sentiments to procure long-term financial security in their home country by investing in physical assets. Another factor may also be that they are surrounded and driven by uncertainties due to the pandemic.
The fact that the value of the Indian rupee is depreciating has also led to the increase in demand for luxurious properties. This has, in turn, increased the purchasing power of the NRIs. In addition to this, builders have also announced several discounts and offer on the luxurious property, thus evoking consumer sentiments. Most of the NRIs are looking for end-use properties and fueled the demand for the property in the luxurious segment. The spacious features, unique architectural designs and interiors, specific amenities, etc., are reasons for the increase in demand for luxurious properties over other segments.
The NRIs making investments in India are expecting the price of the property to remain stable for the short term, which is the next 12 months, while some of the NRI investors are also investing with the hope that the price of the property will increase during the year. On dealing with the question of the property price in the long run (let’s say in the next 5-10 years), it is expected to increase drastically due to the increased demand for luxurious properties in India.
Markets for luxurious property
The IT hubs such as Bangalore and Pune have seen the highest demand by the NRIs. These two cities saw approximately 48,370 units being sold in the year 2020 collectively, accounting for 35% of India’s total demand for luxurious properties.
Source: ANAROCK Survey
It is interesting to note that a minimum of 67% of the NRIs is looking for ready-to-move-in properties. It is also interesting to note that 27 % of NRIs and resident Indians prefer under-construction properties, which will be delivered within a year. The demand for RTMI homes has also been recorded at 29% by the leading real estate portal.
Some of the exciting facts of luxurious property investments in Indian in the year 2020-2021 include:
- 24% of NRIs have already booked homes in the last six months
- 38% of the NRIs are looking forward to making the best out of India’s prevailing market conditions, such as discounts, offers, and lowest-bets home loan interest rates.
- 86% of the NRIs are also seeking to invest with reputed developers credited with the highest project completion capabilities, which reduces the risk of execution.
To be ready in six months
To be ready in one year
Real estate: The best asset class for investment
“Real Estate continues to be the best choice for investment among investors – ANAROCK.”
Despite all the headwinds in the residential property segment, real estate is the top priority for investment among investors compared to the stock market, FDs, and gold. 68% of the total NRI believe real estate is the best asset class to invest in. One of the main reasons for this is the volatile nature of most asset classes, making real estate the safest option to invest in. It is also the best option to invest as it is a long-term investment.
After all the setbacks faced by the real estate sector in the year 2020, the luxurious segment saw an increase in demand. This demand was mainly observed from the NRIs, and the reason for the demand is the reduced value of Indian currency. The pandemic also saw several builders providing offers and discounts on luxurious properties, which helped make these properties more desirable.
Despite the setbacks created in the real estate sector, real estate is considered the best investment option among investors. Assetmonk is an online platform that offers investment opportunities in top Indian cities such as Bangalore, Chennai and Hyderabad. Assetmonk also offers a wide range of products belonging to the different real estate segments such as Senior Living, condominium, co-living, etc. Assetmonk also offers properties with both long term and short term benefits. Visit our website for more details.
Increasing demand for Luxurious Homes in Indian Market FAQs:
The definition of the term luxury varies from one person to another. Luxury homes are considered to be those properties ranging between Rs. 90 Lakh and above. Some of the common factors determining luxurious property are its size, location in optimal areas, and construction with high-end materials and designed with architectural details that are not very common and great amenities.
The luxury properties market has proven to be better than traditional real estate markets during the pandemic. There was an increase in demand not only from residents but also from the NRI population. They always remain desirable, regardless of the market trends.
The Reserve Bank of India has in its circular provided for real estate investments by NRIs. They are permitted to own any residential or commercial property in India. The circulars issued by the RBU has stated that the investor need not necessarily seeks any specific permission from the RBI or send any communication regarding the same to RBI. The Tax laws also provide for real estate investments by NRIs.
NRIs’ best investment plans include Fixed Deposit, Public Provident Fund, equity, mutual funds, and real estate.
Real estate is all together is a great investment option. Investing in residential real estate is also a significant investment as it is advantageous and is also a long term asset. It is also a perfect investment option in the current situation whereby ‘work from home’ is gaining prominence. Residential property is also a significant investment as it is a more durable option to invest.
Electronic City, Kanakapura Road, Yelahanka, Thanisandra, etc., are the best locations for Bangalore’s real estate investments.