Life of Luxury: Decoding the Growth of India’s Booming Luxury Real Estate Sector

• Interview with Anmoll D Shroff, Founder & CEO, Graanth Realty

1. What are the factors driving the growth of the luxury real estate market in India?

India’s luxury real estate market is witnessing a tremendous growth spurt, driven by multifactorial drivers. Key among these is the increasing number of HNIs (High Net Worth Individuals) and UNHIs (Ultra High Net Worth Individuals) in the country, who are investing heavily in this segment. At present, the segment is in a strong expansion phase, with several new projects focused on luxury properties under construction. According to the latest Knight Frank report, a resounding 1,73,241 homes were sold in the first half of 2024, marking the highest sales in the past 11 years. The luxury housing segment too saw significant activity, with homes priced above ₹1 crore accounting for 41 per cent of total sales. Confirming the same is a report by CBRE, a leading real estate consultancy, which observed a 27 per cent increase in sales of luxury units priced at ₹4 crore and above, amounting to approximately 8,500 units across seven major cities during the January-June 2024 period. Other factors contributing to this swell are evolving lifestyle preferences with a keenness for properties that are reflective of their aspirations, increased NRI investments, globalisation, and rapid urbanisation with infrastructure development in key Indian cities. We foresee this positive trend continuing in the near future.

• The demand for affordable housing has stagnated, encouraging more developers to shift their focus on premium properties. Do you foresee this trend continuing in the coming future?

The slowdown in demand for affordable housing, especially in urban centres, has led developers to increasingly prioritise premium and luxury projects. This shift can be attributed to evolving customer preferences led by rising disposable incomes, and growing demand from HNIs, UHNIs, and NRIs. Additionally, rapid urbanization and infrastructure development in major Indian cities have further enhanced the appeal of luxury real estate. While this trend is expected to persist, factors such as interest rates, the health of the Indian economy, and government policies may impact its trajectory.

• What are some of the prime considerations for buyers interested in luxury property investments?

When investing in luxury properties, buyers typically prioritise a few key factors, including the developer’s reputation and track record of delivering luxury projects in a timely fashion, as well as the project’s location with prime, well-connected areas that offer easy access to business hubs, elite schools, healthcare facilities, and upscale lifestyle amenities scoring high on the list of asks. Further, buyers are drawn to projects with high construction quality that encompasses premium materials, modern architecture and innovative design. Buyers are increasingly seeking out projects with exclusive features such as private pools, gyms, smart home technologies and concierge services, as well as advanced security systems and privacy – not surprisingly, gated communities are thus topping the list of the most sought-after properties. Future-minded homebuyers are also more partial to ecofriendly developments that are backed by green certifications and energy-efficient design. Last but not least is the resale value and appreciation potential of the property, with projects located in areas with high growth potential that ensures long-term value appreciation in high demand.

• What are the most popular established and emerging micro-markets for luxury properties in Mumbai?

Mumbai comprises several established and emerging micro-markets for luxury properties, which stand out for their prime location, excellent infrastructure, and premium lifestyle offerings:

Established Micro-Markets:

1. South Mumbai (Malabar Hill, Altamount Road and Cuffe Parade): A location that’s coveted for its prestige, heritage and exclusivity, South Mumbai remains a top choice for ultra-luxury properties that combine panoramic sea views with proximity to key business districts.

• Bandra West: A vibrant neighbourhood favoured by celebrities and business elites, Bandra offers upscale residential options with premium lifestyle amenities and a lively social scene.

• Juhu: This beachfront suburb is highly sought after for luxury homes, due to its serene surroundings, celebrity residents and high-end properties.

• Worli: With premium high-rise developments and sweeping views of the Arabian Sea, Worli has become a hub for luxury apartments and offers seamless connectivity to both South and North Mumbai.

Emerging Micro-Markets:

1. Lower Parel: Formerly an industrial area, Lower Parel has transformed into a high-end residential and commercial hub, attracting luxury homebuyers with its modern infrastructure and proximity to corporate offices.

• Powai: Known for its greenery and scenic lake, Powai is rapidly emerging as a luxury residential hotspot, offering premium homes in gated communities and proximity to tech hubs.

• BKC (Bandra-Kurla Complex): Primarily a business district, BKC is emerging as a preferred location for luxury residential projects due to its central location, excellent connectivity and growing infrastructure.

• Wadala-Sewri: Once considered a quiet suburb, this location is now popular for luxury residential properties due to improved connectivity and infrastructure.

• Navi Mumbai: Areas such as Vashi, Nerul, Palm Beach Road and Kharghar are witnessing significant growth in luxury real estate due to their strategic location and infrastructure developments.

• Thane: With rapid infrastructure development and abundant green spaces, Thane is increasingly appealing to luxury buyers seeking spacious homes that are removed from the city’s hustle-and-bustle, while still being well-connected to major business and entertainment hubs.

These micro-markets will continue to gain traction among luxury property buyers in Mumbai, due to their unique blend of location, lifestyle and growth potential.

• Statistics indicate that the demand for luxury homes is being driven by millennial buyers. Why do you think this age group is keener on luxury properties?

Millennial homebuyers are backed by their rising incomes and financial independence, which give them the ability to seek out luxury homes that offer lifestyle-enhancing amenities, such as smart technology and wellness spaces. They prefer modern, sustainable designs in prime urban locations that fuse convenience with social connectivity. Additionally, many millennials view luxury real estate as a long-term investment, reflecting both their financial goals and status aspirations.

• What are the initiatives that are benefiting or helping the overall upward trajectory of premium luxury?

Today, leading developers are offering premium amenities, smart home technology, and lifestyle-focused services that cater to the evolving demands of luxury buyers, further driving interest in high-end properties. Luxury brands are also investing in personalised and immersive customer experiences, both online and offline, to meet the evolving expectations of upwardly mobile customers. Many luxury buyers are mindful about sustainability and their carbon footprint, which is prompting green developments.

From a broader lens, large-scale infrastructure projects such as the addition of new metro lines and highways, as well as smart city initiatives are encouraging buyers to regard certain neighbourhood through the lens of connectivity and convenience. Further augmenting the growth of this sector are financial incentives such as tax benefits for homebuyers, favourable interest rates, and regulations such as RERA (Real Estate Regulatory Authority), which have improved transparency and buyer confidence. Put together, all these factors are encouraging investment in high-end real estate.

• What is the role of conveniences and world-class amenities in swaying the interest of prospective buyers?

Modern-day conveniences and world-class amenities are crucial in attracting prospective luxury homebuyers. High-end features such as smart home technology, private gyms, wellness centres, infinity pools and concierge services offer an aspirational lifestyle, which also exuding comfort, exclusivity and personalisation. These amenities not only enhance the quality of life but also align with modern lifestyle aspirations, making luxury properties even more appealing. Beyond spaces, buyers are seeking homes that promise premium experiences, which significantly influences their interest in high-end real estate.

• Indian homebuyers have been taking advantage of the relaxed Reserve Bank of India (RBI) norms to consider buying foreign property, especially in Dubai – a destination preferred for its tax and business-friendly environment. What are some of the key advantages does investing abroad present to Indian consumers?

Investing abroad, particularly in destinations such as Dubai, offers Indian homebuyers several key advantages. For instance, Dubai’s tax-friendly environment, including zero property tax, enhances the appeal of real estate investments for Indian homebuyers, as does the prospect of diversifying their investment portfolio, which allows them to reduce their dependence on the domestic market and mitigate risk. Dubai’s real estate market is also hailed for its stability and growth potential, offering opportunities for long-term capital appreciation and rental income. The recent uptick in Dubai real estate investments can be attributed to relaxed regulatory norms and simplified processes for foreign investors, which make it easier for Indian buyers to acquire property abroad. Additionally owning property in Dubai can offer lifestyle advantages and potential residency perks, appealing to those seeking a second home or business opportunities in a global city.

• Investment properties or second homes? What do you think is the biggest motivation for buyers eager to invest in luxury properties in destinations such as Dubai?

For buyers eager to invest in luxury properties in destinations like Dubai, the motivations can vary, but two primary factors often stand out: investment properties in Dubai offer high rental yields, as well as capital appreciation potential for buyers. This makes Dubai’s real estate market a financially sound consideration, as does the prospect of diversifying one’s investment portfolio. Owning property in Dubai also comes with the benefit of eligibility for a Golden Visa, which assures long-term residency. From the perspective of owing a second home, Dubai stands out for its excellent social infrastructure and elevated lifestyle experience, coupled with its favourable climate. Further, its strategic location and reputation as a global business epicentre assures buyers of enhanced business opportunities.

Ultimately, the decision to purchase real estate in Dubai as an investment property or a second home depends largely on one’s financial and personal goals.