The luxury real estate market in India has witnessed an unprecedented surge in demand, surpassing the available supply in many cities. DLF Ltd, a renowned real estate company, created waves with the sale of its newly launched luxury project in Gurugram.
Unprecedented Demand and Overwhelming Response
DLF Ltd’s luxury project, The Arbour, comprised over 1,100 flats priced at Rs 7 crore and above, and astonishingly, all the units were sold within three days. The project received an overwhelming response, with more than 3,000 applications from interested homebuyers. Encouraged by this success, DLF is now preparing to launch its next project, Crest II, with a ticket size of Rs 20 crores, anticipating a similar response. Furthermore, the inventory of ready homes in India’s top seven cities within this segment is currently at a 12-month low.
Expanding Scarcity in the Market
The surge in demand extends beyond the primary market; even the secondary market is facing a scarcity of luxury and high-end properties across Delhi, Mumbai, and Bengaluru. Delhi, particularly, has witnessed significant transactions involving land and bungalows in prestigious areas such as the Lutyens’ area and the southern parts of the city. The demand for luxury floors has also experienced a notable increase. With limited ready-to-move-in properties entering the market, prices in several pockets have surged by 30-40 percent over the past three years.
Changing Buyer Behaviour and Return of Investors
Buyers who initially sought only ready-to-move-in apartments are now willing to consider under-construction options. Additionally, real estate investors are making a comeback, recognizing the value of hard assets during inflationary times. These discerning investors understand that the real estate market goes through cycles of boom and slump, typically lasting five to seven years. The ongoing upswing in luxury home sales, initiated post-pandemic, is expected to continue for several more years.
Optimism Backed by Positive Economic Factors
Optimism within the luxury real estate market is well-supported by India’s projected growth rate of 6.5-7 percent, as estimated by the Reserve Bank of India (RBI). Several macro factors contribute to this positive outlook, including the RBI’s decision to pause interest rates, moderating inflation as seen in the Consumer Price Index (CPI) for April 2023, which stood at 4.7 percent compared to 7.79 percent in April 2022 and 5.66 percent in March 2023. Furthermore, the improvement in the consumer sentiment index since May 20 provides additional tailwinds to the economy and, consequently, the real estate sector.
Important Considerations for Luxury Real Estate Investors
As a luxury homebuyer, it is crucial to have a clear understanding of your specific needs and preferences. Start by determining the type of property, desired location, amenities, and other essential features that align with your requirements. Creating a list of non-negotiable features and amenities can help you identify properties that closely match your wish list.
The Power of Prompt Action
In a market where desirable properties are quickly snapped up, prompt action is essential. The adage “he who hesitates is lost” truly applies. When you come across a property that fulfills your wish list and meets your expectations, it is vital to act swiftly to secure it.
Thorough Research for Informed Decisions
Before finalizing a purchase, thorough research is crucial. Evaluate the market value of the property, review its legal status, and identify any potential issues. Engaging professional services, such as property inspectors and lawyers, ensures a smooth and secure transaction.
Financial Preparedness for Swift Action
Additionally, it is important to have your finances in order and secure necessary financing well in advance. Being financially prepared enables you to act swiftly when the right property becomes available, increasing your chances of securing it.