Throughout 2023, there has been a consistent upswing in the luxury real estate segment. The year concluded with more than 2,00,000 housing units launched across key cities, with the luxury segment dominating more than 35% of the total units launched. The segment witnessed maximum traction in cities like Bengaluru, Delhi NCR, Mumbai, and Hyderabad, indicating that good times are not far off. The surge in demand has not only encouraged the renowned developers to launch exclusive luxury projects but also marked a new beginning for the segment. Looking at all good points, it is likely that 2024 will uncover new heights for the segment.
Luxury segment performance in 2023
The market-wise performance points in the right direction. As per a recent report by a leading IPC, Bengaluru witnessed residential unit launches of around 10,200 in Q4 FY2023, a growth of 24% quarterly and a 10% expansion in the same period the previous year. Residential launches for 2023 stood at over 34,300, a 1.3% growth over the strong momentum recorded in 2022. When it comes to the share of luxury real estate, high-end units accounted for 56% of Q4 launches, a historic high, surpassing 49% share in the previous quarter. Areas, such as Thanisandra Road (north), Whitefield (east), HSR Layout, and Koramangala (south) recorded several high-end and luxury projects launches by listed developers. For 2023, the high-end and luxury segment accounted for 42% of launches. In markets like Delhi NCR, the luxury segment has emerged as the strongest most growth driver for the residential sector. The last quarter of 2023 recorded impressive growth with the high-end and luxury segment capturing almost 47% of the market share. Gurugram remained at top, with other markets like Noida and Noida extension gaining prominence. However, in Mumbai, the mid-segment dominated, and the luxury segment has been able to capture 22% of quarterly launches.
Technology a key enabler
Amid high expectations, a few trends are standing out, and these will be the demand drivers for the segment in 2024. Taking into consideration the aspirational value, the sentiment of luxury homebuyers is inclined towards big opulent spaces and widely laid-out plans. As a result, luxury plotted developments and luxury villas are becoming popular. The suburban markets of Bengaluru are emerging as popular destinations and 2024 will see a lot of good projects here.
In 2024, the desire to have complete autonomy will influence the luxury segment and technology will be the key enabler. Luxury homes will lead the way by integrating home systems, energy-efficient solutions, and cutting-edge security features. The appeal of an automated living space will increase the desirability and demand for these properties.
Need to incorporate more sustainability features
In the wake of rising awareness, the luxury segment needs to proactively incorporate more sustainability features. Green building practices, energy-efficient appliances, and eco-friendly amenities will be the unique propositions. This will draw buyers towards assets that are not just opulent and elegant but also contribute to a sustainable and environmentally conscious lifestyle.
The emergence of the experience economy is transforming how we perceive a space. In 2024, the luxury segment will be more than just design and structural magnificence, but a space that carefully curates fine living experience. With innovative thinking and customized offerings, builders and developers have the power to democratize the entire experience and leverage opportunities to accelerate demand and sales.
(The author is managing director of BCD Group.)
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Angad Singh Bedi is currently the managing director of the BCD Group. He has been instrumental in the group’s diversification into low-income housing, luxury residences and corporate centres as well as middle- to affordable housing, thereby ensuring the delivery of exceptional commercial and residential spaces through strategic collaborative ventures. Bedi began his career at consulting firms such as KPMG and PricewaterhouseCoopers.
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