Not so long ago, homes sporting price tags in excess of $1 million (above ₹7.4 crore) were struggling to find buyers, due, in part, to a struggling economy. Since demonetisation in 2016, followed by the roll-out of the Goods and Services Tax (GST) in 2017 and the NBFC crisis in September 2018, the country’s real estate sector has seen a precipitous downturn. Now, thanks to a surging stock market, various Central and state initiatives, including a historic low interest rate regime, the demand for the segment is shifting north.

Notwithstanding Covid-19, India’s high networth Individuals (HNIs) are back to buying million-dollar homes — be it a 40th-floor apartment in Mumbai’s Lower Parel, a weekend home in the hills, or a bungalow in Lutyens’ Delhi.

“The upper end of the market is showing exuberance,” says Gulam Zia, executive director, Knight Frank India, a property consultancy firm. According to Zia, the exuberance — seen over the last two quarters from January to June — is linked to the bull run in equities. In mid-August, the S&P BSE Sensex breached the 55,000 mark, having more than doubled from a low of 25,000 in March 2020. Analysts say the rally is being driven by the ample liquidity in the financial system and hopes of a strong economic recovery — India’s GDP is projected to grow at 9.5% in FY22.

“We have seen clients selling stakes in their businesses and investing the long-term capital gain amount back into real estate to optimise tax outflow and take advantage of low (market) prices,” says Amit Goyal, CEO, India Sotheby’s International Realty, which has sold a slew of homes worth over ₹70 crore in Delhi’s posh locales of Sunder Nagar and Jor Bagh. “We saw people upgrading from a 500-squareyard (4,500-sq.-ft.) home to a 865-square-yard (7,785-sq.-ft.) place, in a much greener colony,” adds Goyal. Some of his clients have also picked up multi-million dollar farmhouses in the suburbs of Radhey Mohan Drive and Chattarpur in south Delhi.

“There is always a correlation between HNI buyer sentiment and the stock market,” says Anuj Puri, chairman, ANAROCK Property Consultants. Real estate is an important diversifier for HNIs. “Now, amid the pandemic, it remains a reliably stable asset.” The million-dollar home market has about 5,000 available units as on June 30, 2021, with the maximum availability in Mumbai, followed by the National Capital Region, and Bengaluru, says Puri. “In a (bullish) equity market, Mumbai is the biggest beneficiary,” adds Goyal.

During January-June 2021, ₹4,000 crore worth of multi-million dollar homes were sold in the country’s financial capital. More than 45% of the homes purchased were priced between ₹15 and ₹20 crore, while 40% were priced between ₹20 and ₹30 crore, according to data by real estate platform Square Yards. Less than 10% of the transactions were in the ₹30-50 crore price bracket, while those priced above ₹50 crore formed 7% of the total share. “There was a 63% hike in these high-ticket transactions compared to 2019 and 2020, which can be attributed to lesser stamp duty, a 15-30% price correction in high-value transactions and the recent cheer in equities,” says Anand Moorthy, business head, data intelligence and asset management, Square Yards.

Over the last eight-nine years, property prices in most key markets across India have been stagnant or have reduced by 25-30%. Homes in Delhi’s Sunder Nagar, for example, which would cost ₹100 crore in 2012- 13, are now available for ₹70 crore.

In Mumbai, the stamp duty reduction by the Maharashtra government gave a huge boost to the state’s real estate market. “When you are talking about a ₹10 crore-plus apartment, a 2% reduction on that gives you enough money to buy one more car. That is the perspective many of them use,” says Knight Frank India’s Zia.

Nearly 60% of the HNI home transactions in Mumbai came from residential projects in Lower Parel, a commercial suburb and playground for the rich. Higher floors were the more preferred choice, as 34% of the transactions recorded were for units on the 40th floor and above, according to the Square Yard report. Some of marquee real estate projects that recorded 10 or more transactions include Raheja Artesia, Indiabulls Blu, Omkar 1973 and Raheja Vivarea. Bollywood mega star Amitabh Bachchan, Goldman Sachs MD Rajat Sood, HDFC Securities MD and CEO Dheeraj Relli, Smita Parekh, wife of HDFC chairman Deepak Parekh and Emaar India CEO Ajay Munot are among those who bought ultra-luxury properties.

“The pandemic led consumers across segments to re-assess their homes, and amongst the luxury set, the re-assessment happened at a much deeper level,” says Prashant Bindal, chief sales officer, Lodha, one India’s top real estate developers. “There is an escalated demand for bespoke luxury residences (₹25 crore and above) that offer experiences of the highest standard,” he adds.

The must-haves for a luxury homebuyer today, he says, include large green and open spaces, private gardens, balconies/decks, customisable bigger spaces and recreational areas. “The requirement for bigger bedrooms is very pronounced. In the past it was 120-sq.-ft. bedrooms, now the demand is for 200 sq. ft,” adds Amarjit Bakshi, chairman and managing director of Gurugram-based luxury real estate developer Central Park. “One thing is certain. After Covid-19, everybody is very particular about spaces, clean air and hygiene.

While the vanity addresses of the main cities continue to draw attention, for many HNIs owning second homes in holiday destinations is also a priority. A key criterion being: they need to be within motorable distance.

“Weekend homes are back in vogue,” says Punit Agarwal, CEO of Nirvana Realty. “Homeowners have decided to make a quick move from life in bustling city lanes to calmer, cleaner, more open spaces in smaller towns or hill stations,” he adds.

“From Delhi a lot of people have gone up to the hills and bought in droves,” says Anshuman Magazine, chairman and CEO, India, SouthEast Asia, Middle East & Africa, of property consultancy firm CBRE, adding, the preferred locales are the hill destinations in Uttarakhand and Himachal Pradesh.

The Reserve, an enclave of villas, in Lodha Belmondo, the Lodha group’s high-end property on the Mumbai-Pune
The Reserve, an enclave of villas, in Lodha Belmondo, the Lodha group’s high-end property on the Mumbai-Pune expressway.
Image : Special Arrangement

For Mumbai’s rich, locales, including Alibaug, Lonavala, Karjat, Pavana, have been preferred choices. “Here they have large, spacious homes set amidst green expanses. These homes make it easier to be closer to nature, something which is not easily achievable in a city dwelling,” says Lodha’s Bindal. For instance, The Reserve in Lodha Belmondo is set within a 100-acre luxury resort on the banks of Pavana. “Residents have access to a golf course, a 50,000-sq.-ft. country club and spa, 90 acres of landscaped open greens, among other things,” says Bindal.

Since March last year, Nirvana Realty has sold close to a dozen milliondollar-plus homes, mainly villas, in the outskirts of Mumbai. These villas start from 5,000 sq.ft., have four-five bedrooms, and boast of amenities such as infinity pool, jacuzzi, gaming zone, gym, mini-theatre, terrace barbecue, and kitchen garden. “Before the pandemic we used to boast about common luxury amenities. Now all these amenities have come inside the house,” says Nirvana Realty’s Agarwal.

“This is a significant change from how luxury homebuyers used to value properties in their list of preferred projects,” concludes Ram Raheja, director, S. Raheja Realty.

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