India's Luxurious Home Market in Mumbai & NCR

India's Luxury Residential Home Market

The luxury real estate market in India is an attractive investment segment, demonstrating consistent capital appreciation, especially in major metros like Mumbai, Delhi NCR, and Bangalore. This growth trajectory is driven by several factors, including rising affluence, urbanization, and infrastructure advancements, making luxury real estate one of the most dynamic sectors in India’s property market.

According to Mordor Intelligence, India’s luxury real estate market is currently valued at USD 38.02 billion (2024) and is projected to reach an impressive USD 101.92 billion by 2029, growing at a compound annual growth rate (CAGR) of 21.81%. This sharp upward trend indicates an increasing demand for high-end residences, reflecting the aspirations of affluent homebuyers across the country.

With evolving consumer expectations and a robust pipeline of luxury developments, India’s luxury real estate market is poised for unprecedented growth in the years ahead.

Key Highlights:

1.?????? Surge in Sales Value:

·???????? Sales of luxury homes priced above ?50 crore rose significantly, from ?2,859 crore in 2022 to ?4,319 crore in 2023, marking a 1.5x increase.

·???????? Total luxury home sales in 2022 and 2023 reached approximately ?7,177 crore, reflecting strong demand and economic resilience in the luxury segment.

2.?????? Transaction Volume and Price Segments:

·???????? In 2023, 45 luxury homes were sold compared to 29 in 2022.

·???????? Of these, 14 homes were priced above ?100 crore, with the majority (79%) in Mumbai, indicating robust demand for ultra-premium properties.

3.?????? Leading Markets:

·???????? Mumbai: Dominates luxury sales, especially in high-end areas like Malabar Hill and Worli.

·???????? Delhi NCR: Top-performing submarkets include Golf Links and Vasant Vihar, with notable sales in Gurugram as well.

·???????? Buyers showed a growing preference for larger homes, with the average apartment size increasing by 18% year-over-year.

4.?????? Redevelopment and New Luxury Projects:

·???????? The luxury market split 70-30 between new developments (70%) and resale properties (30%).

·???????? Space constraints in Mumbai drive redevelopment projects in upscale neighborhoods like South and Central Mumbai, as well as Bandra and other western suburbs, where limited supply and exclusivity enhance appeal.

5.?????? Limited Supply and Brand Value:

·???????? Limited developers have the capability and brand power to create and sell ultra-luxury homes, keeping supply restricted and exclusive.

·???????? Although several luxury projects approved in 2020 and 2021 are expected to launch in the next 4-6 years, the current market is balanced, with demand meeting supply levels.

6.?????? Window for Redevelopment, mostly in Mumbai:

·???????? Redevelopment opportunities are expected to decrease over the next five years as available land for Redevelopment of such property diminishes.

·???????? Given the scarcity of land, affluent buyers and investors are seizing current opportunities to purchase luxury homes before future supply constraints arise.

A case in point

DLF's New Luxury Residential Project in Gurugram

7.?????? Pricing and Size:

·???????? Apartments range from 9,500 to 16,000 sq. ft.

·???????? Priced at Rs 80,000 per sq. ft., with an average cost around Rs 100 crore per unit.

8.?????? Amenities:

·???????? Includes an expansive 200,000 sq. ft. clubhouse, double the size of the one at DLF Camellias.

·???????? High-end amenities designed to cater to ultra-luxury standards.

9.?????? Location: Situated in Gurugram, a prime area popular among top business executives, CXOs, and startup founders.

10.?? Developer and Legacy:

·???????? DLF, renowned for high-end projects, developed India's top luxury properties, including The Camellias, where some sales have crossed Rs 100 crore.

11.?? Luxury Market Demand:

·???????? Strong demand among ultra-high-net-worth individuals and NRIs.

·???????? NRI investment in DLF projects increased from 3% in FY 2020-21 to 23% in FY 2023-24.

12.?? Project Scale:

·???????? DLF The Dahlias spans 17 acres with 29-floor towers and about 400 super-luxury apartments.

·???????? Expected to set new benchmarks in India’s ultra-luxury residential market.

13.?? Record-Breaking Sales:

·???????? Sales value for The Dahlias projected at Rs 34,000 crore, making it one of India’s largest residential projects in terms of value.

·???????? DLF holds a 25% market share in the ultra-luxury real estate segment in India for properties above Rs 25 crore.

14.?? Comparative Projects:

·???????? The Dahlias’ sales value equals combined sales of prestigious projects like Three Sixty West in Mumbai, DLF Camellias, and Naman Xana.

·???????? Gurugram’s Camellias project continues to record high resale and rental values, underscoring DLF's reputation.

15.?? Strategic Focus:

·???????? Emphasis on NRI sales and building premium communities with 7-star hospitality and scenic views of Gurugram’s Golf Course.

·???????? DLF aims to provide unmatched luxury, world-class amenities, and quality construction, setting new standards in the Indian luxury real estate market.

16.?? Impact on Real Estate Market: With The Dahlias, DLF strengthens its position as a leader in India’s ultra-luxury segment, capturing the aspirations of the wealthy in India and abroad.

Buyers of New Luxury Residential Properties in India (?50-100 Crore Range)

17.?? Affluent Segment Growth:

·???????? High-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNIs) in India are the primary buyers, with demand driven by their desire for high-end, bespoke living and confidence in the long-term value of luxury properties.

·???????? A growing population of affluent buyers with substantial wealth creation in India fuels this segment.

18.?? Rising Demand and Wealth Creation:

·???????? India’s wealthy are not only increasing in numbers but are also showcasing their affluence, seeking unique, luxurious living experiences with exceptional amenities and prime locations.

·???????? This segment's expansion reflects India’s broader economic growth, with wealth creation bolstering the market for ultra-luxury properties.

19.?? Market Insights and Preferences:

·???????? Mumbai leads in luxury real estate demand due to its high concentration of HNWIs, including entrepreneurs and celebrities, and limited space availability, creating exclusivity and driving prices upward.

·???????? Larger properties are in demand, with units over 4,000 sq. ft. making up 22% of Mumbai's luxury housing primary sales in the first half of 2023, compared to 14% in 2018.

20.?? Limited Impact of Rising Interest Rates: Unlike other housing segments, luxury home buyers are less affected by rising interest rates, as most are cash or equity buyers, mitigating the impact of financing costs.

Regional Demand in Mumbai and NCR:

·???????? Mumbai, with the highest UHNI concentration in India, continues to see substantial demand for ultra-luxury homes. A limited land supply and water-constrained geography add to property exclusivity.

·???????? Delhi NCR also has significant demand in areas like Golf Links, Vasant Vihar, and select locations in Gurgaon, appealing to affluent buyers seeking spacious and prestigious living spaces.

21.?? Self-Use as a Primary Motivation: Unlike other segments where investment might be a consideration, most luxury property buyers in Mumbai and NCR are purchasing for self-use rather than investment, underscoring a genuine desire for distinctive living experiences.

22.?? Future Demand Outlook: Despite limited supply, Mumbai's ultra-luxury segment is expected to see steady growth. As per CRISIL, the Mumbai Metropolitan Region (MMR) anticipates a 1-2% overall growth in demand this fiscal year, with the luxury end segment contributing 5-10% of this demand.

CA Harshad Shah, Mumbai [email protected]