Indian Economy News

There has been over 200% year-on-year surge in sales value in ultra-luxury homes which were priced more than Rs. 40 crore (US$ 4.8 million) in 2023

According to Anarock Research data, in comparison with the entirety of 2022, ultra-luxury residences costing more than Rs. 40 crore (US$ 4.8 million) apiece saw a spike in sales and overall sales value in 2023. Compared to the 13 ultra-luxury homes that were sold in these locations for a total sales value of about Rs. 1,170 crore (US$140.4 million), up to 588 ultra-luxury homes will be sold throughout the top seven cities in 2023 for a collective sales value of roughly Rs. 4,063 crore (US$ 487.4 million).

The report also stated that Mumbai led the way with 53 ultra-luxury residential deals in 2023, accounting for 91% of all deals; Delhi-NCR had four deals, two of which were for ultra-luxury properties in Gurgaon and two of which were for bungalows in Delhi; Hyderabad had one deal over Rs. 40 crore (US$ 4.8 million). In 2023, at least 12 agreements totalling more than Rs. 100 crore (US$ 12 million) were made; two of these deals were in Delhi-NCR and 10 of them were in Mumbai. About 79% of the agreements were closed by business owners and 16% by C-suite executives, according to buyer profiles.

Mr. Anuj Puri, Chairman of Anarock Group, stated that since the epidemic, there has been an increase in demand for both luxury and ultra-luxury real estate, with HNIs and ultra-HNIs purchasing these residences for personal use, investment, or both. The increase in demand for ultra-luxury real estate can also be attributed to HNI investment portfolio reorganisations brought on by the expected volatility of the stock market as a result of ongoing geopolitical tensions. Leading Grade A developers have been increasing the amount of new inventory they provide in the ultra-luxury category, which is not surprising. There is a very clear FOMO (fear of missing out) component among wealthy Indians toward acquiring the most desirable options before someone else does.

Mumbai alone has sold 53 ultra-luxury apartments for more than Rs. 40 crore (US$ 4.8 million) apiece, accounting for 91% of all deals made in the top seven cities in 2023 out of at least 58 total. In Delhi-NCR, at least four discrete transactions involving ultra-luxury homes totaling more than Rs. 40 crore (US$ 4.8 million) each were completed: two for apartments in Gurgaon and two for bungalows in New Delhi.

At least three of the 53 agreements in Mumbai City had price tags over Rs. 200 crore (US$ 24 million), and seven of the deals were finalised for amounts ranging from Rs. 100 to Rs. 200 crore (US$ 12–24 million) each.

Apartments clearly remained the preferred property type for HNIs as of 58 deals; 53 were for apartments, and the remaining five were for bungalows. At least 79% of the total deals were concluded by businessmen and 16% by senior professionals from across various sectors. Politicians and Bollywood celebrities accounted for the remaining 5%.

The Covid-19 pandemic unleashed a demand storm for the luxury and ultra-luxury homes segments. The collective data of 2022 and 2023 till date, showed that 71 ultra-luxury residential deals worth approximately Rs. 5,233 crore (US$ 627.8 million) were closed in the top seven cities (Mumbai, Delhi-NCR, Hyderabad, Chennai, Bengaluru, Kolkata, and Pune).

At least ten of the 13 sales, totaling about Rs. 1,170 crore (US$ 140.4 million), that were finalised in 2022 involved apartments, with the remaining three dealings being bungalows. Eleven of the agreements were finalised in Mumbai, and the other two were in Delhi-NCR. Remarkably, in 2022, there were no such huge ticket-value deals in any of the other five leading cities. At least nine of the 13 ultra-luxury residences that were sold in 2022 were for apartments in Mumbai City that ranged in price from Rs. 100 to Rs. 150 crore (US$ 12-18 million).

According to Mr. Ashwin Chadha, Chief Executive Officer of India’s Sotheby’s International Realty, rising exports, a thriving startup ecosystem, and the explosion of new prospects in a number of industries, including global manufacturing in India, have all boosted the nation's economy and aided in the development of wealth. Consequently, there is now a greater number of affluent people in India, with a notable trend of billionaires' average age decreasing. Ultra-luxury real estate is becoming a popular choice for the younger, wealthier generation of investors.

He further stated that as the number of billionaires in India is projected to grow significantly, over 100% growth by 2027, and the demand for ultra-luxury properties is anticipated to sustain its upward trajectory.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.