Luxury Real Estate in India

“Landlords grow rich in their sleep without working, risking or economising”
– John Stuart Mill

Luxury Market Segment

In the past, luxury home buyers in India were satisfied with an address to boast of along with whatever additional facilities money could buy. This has changed completely due to globalization with the Indians traveling abroad and NRIs settling back in the home country. The expectations have changed and now the buyers are expecting to buy lifestyle with all the luxuries that they could afford to have. Apart from pools and gardens, complete home automation, interiors based on Mediterranean or Italian Architecture and home security advanced enough to put the CIA to shame. As a result three tiers of real estate options exist, Super Luxury, Affordable Luxury and Branded homes.

Super Luxury

Super Luxury homes come with private gyms, swimming pools, zen gardens, complete home automation, interiors based on Mediterranean or Italian architecture. In addition, the owner can request import of any latest gadget like surround sound or other ultra modern amenities available abroad. Essentially building one of a kind home for living and hosting memorable parties. These are called “Super Luxury” or luxury with no limits wherein the price is no constraint. You can find “who’s who” of the rich elite living in the communities congregated together. For e.g the Epsilon Super Luxury Real Estate in Bangalore boasts of cricket legend Rahul Dravid among other such notable personalities.

The cost varies from city to city but the following is a ballpark picture of the situation.

Mumbai – $6 million to $15 million
Delhi – $6 million to $15 million
Bangalore – $300,000 to $900,000
Chennai – $1 million to $1.5 million
Pune – $300,000 to $1 million
Hyderabad – $150,000 to $750,000
Kolkata – $150,000 to $750,000

Affordable Luxury

Primarily catered to the middle-to-upper class buyers. We are still talking about swimming pools, shared clubhouses with Gyms etc., These residents may not rub against the popular stars but live with their own peers of high net worth individuals. It is a high investment arena wherein exclusive customization are the norm and developers as well as buyers take their time to ensure the deal results in complete satisfaction to all involved.
Due to modest price tags, the sales are fairly quick.

Mumbai – $2.2 million to $4 million
Delhi – $1.5 million to $3 million
Bangalore – $100,000 to $175,000
Chennai – $200,000 to $750,000
Pune – $175,000 to $300,000
Hyderabad – $120,000 to $300,000
Kolkata – $100,000 to $175,000

Branded Homes
Most developers have experience in building homes for the mass market and lack experience in building luxury homes. So they get into partnership with luxury brand and promote such properties. This is a “win-win” situation wherein the developer is able to deliver products that caters to the needs of the NRIs or PIO investors who are used to such services in their adopted countries. These provide better returns due to the presence of the global luxury brand.

The cost is somewhere in between the above two segments.

Mumbai – $2.2 million to $4 million
Delhi – $1.8 million to $3 million
Bangalore – $300,000 to $,600,000
Chennai – $300,000 to $750,000
Pune – $500,000 to $750,000
Hyderabad – $300,000 to $600,000
Kolkata – $150,000 to $300,000

Why luxury homes?
One would ask with such steep prices why would anyone buy such houses. The recent economic landscape of the GDI growth and startups there are many high networth individuals that live in India or Abroad have disposable income to support the lifestyle they need. However the following are some aspects that may be fueling the growth of luxury home segment.

Status symbol – Indian society is all about comparing the neighbors and what better way to showcase than living in a luxury home
Comfort – With the globalization, the NRIs and others demand modern comforts to raise the family. Swimming pools, themed, landscaped gardens, gyms and other amenities
Security – Every luxury home comes with high end security both with security personnel and security installation that guarantee safety. Accidents and emergencies can be quickly taken care immediately
Technological Enablement – Luxury homes may come with solar generators to remote controlled window shutters for ultra modern lifestyle.
Better neighbors – These housing projects are seen as a perfect environment for one’s children to grow and adults to socialize.
Investment value – Luxury homes are always on demand even in the secondary market and provide significant rental income.

Closing remarks
As you can see there are variety of investment opportunities that are available today depending on the needs of the investor or owner. Beyond the above, there is another segment which I intentionally left out but is relevant to the topic. It is called the “By Invitation Only” properties that are exclusively offered to the ultra rich celebrities, venture capitalists, startup founders among others. These require the buyers to prove to the developers in ways that transcend the ability to pay unheard-of sums of money. The prices of such properties easily cross the $50 to $70 million mark and sometimes lot more and their prices tend to grow rapidly as this market is still evolving catering to the needs of CEOs, owners of billion dollar organizations and other such movers and shakers.

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