There was a popular belief that came into light after the first lockdown that was spoken about in hushed circles and never brought about in the open regarding the housing market sector-that was it was a bubble waiting to burst, a house of cards waiting for it to collapse. The tremendously adverse impact of the many waves of the coronavirus pandemic will cause the market to collapse…
Well that didn’t happen and the data is there to prove it. The below chart is the displays the average price/sqft amongst the top 8 cities of India and their annual growth.
| City | Average price as on June 30, 2021 (in Rs per sq ft) | Annual growth in % |
| Ahmedabad | 3,251 | 5 |
| Bangalore | 5,495 | 4 |
| Chennai | 5,308 | 3 |
| Hyderabad | 5,790 | 5 |
| Kolkata | 4,251 | 2 |
| MMR | 9,475 | No change |
| NCR | 4,337 | 2 |
| Pune | 5,083 | 3 |
| National average | 6,234 | 3 |
Source: Real Insight: Q2-2021
Given the steps taken by various state governments including the centre to keep the real estate sector afloat during these turbulent times one can say that the Indian housing market is at its most affordable price right now. Three months ago a Reuter’s poll predicted India’s housing market growth to be at 0.75%/year. As of 24th August 2021, the poll indicates a 2.5%/year growth so where is the question of market crash?
Premium or luxury housing demand remained constant with hardly any change. The two Covid lockdowns could not have more than 5% impact on the luxury residential segment business loss which means that interest and demand for Premium/Luxury housing didn’t change at all and ever since WFH became a normalized style of working the average person would base what they want from a larger home off of a premium/luxury unit/flat.
The Target audiences are HNIs, NRIs, Business families, Corporate Bigwigs and other niche class of folk. However here are some of the reasons why Luxury Housing will always be high in demand:
- Better Amenities and Security: With premium housing come better facilities and amenities. This segment of housing not only provides better security from theft eventualities, but can also protect people from diseases and viruses due to its high level of sanitization and hygiene control.
- Living Style Alteration: There is a rise in joint family living over a few more years. Covid has changed the mindsets of many families who now dismiss the existing concept of nuclear families. Many people have already started living with their parents, grandparents, and uncles and aunts, to be together in case any such massive emergency comes back in future.
- Aspirations of Millenials: Today’s youthful generation want to “dream big and live big.” Today’s youth energetic, dynamic and believes in planning at every step in their life- whether it is about their dream destination wedding, dream car or the house of their dreams. Millenials have been instrumental in driving demand for the premium luxury housing and the demand from this segment will only grow in the times to come.
- Demand to be a Niche customer: The existing demand from top level executives, business class, NRIs and HNIs will always be on the rise. Demand from this segment will not get much affected from any kind of external factors. The pandemic also witnessed maximum demand from this segment, many of whom have purchased properties solely from investment perspective. Also, with the dollar-INR difference growing the interest from HNIs and MRIs will further see an advancement in investment in premium living.
- Lucrative Price Escalation: The other important aspect of luxury and premium is the return on investment its offers. The escalation of prices of property is inevitable. One of the biggest reasons for increase in prices is demand-supply gaps. The demand has been constantly rising while the supply has been very limited.
The only negative impact on the luxury housing segment is the delay in completion of projects. This is all due to tensions between India and China and the subsequent price increases of raw materials fixtures and furbishing. The time gap will not only delay housing projects but may also ultimately increase the overall cost of project building since builders here will have to rely on alternative sources to meet their building requirements. The centre’s ‘Make in India’ program might give developers a boost from this difficult situation in the medium to long term, but short-term pains for developers are inevitable. Dropping prices in a scenario like this may not be the answer. However, the government might launch measures that might make it more lucrative for buyers to invest in premium/luxury property.
