Rising demand of premium properties in India’s small cities

The housing market in India has witnessed a meteoric rise of 36% year-on-year in the July-September period. A record 120,280 housing units were sold across seven major cities, a significant leap from the 88,230 units recorded during the same period last year. According to reports, this notable upswing is attributed to robust demand, driven by stable mortgage rates.

Further, in their latest data release, real estate consultants disclosed a notable uptick in average housing prices across these seven cities, marking an 11% annual increase during the July-September period this year. Hyderabad outshone the pack with an astonishing 18% rise. Moreover, this quarter marked an all-time high in quarterly sales.

The demand for luxury residential societies has experienced a notable upswing in small cities across India. This transformative trend is underpinned by several key factors.

Seeking a change of pace

There is a discernible shift in people’s quest for a more relaxed life away from the urban hustle and bustle. Small cities have clean air, open space, and a slow pace of life. However, the desire for luxury and top-notch amenities remains unabated. Hence, we witness a burgeoning demand for luxury real estate in small cities.

Ascent of affluent residents

Secondly, small cities and towns have become the favoured abode of a growing cadre of successful entrepreneurs, businessmen, and professionals who have amassed wealth in sectors such as healthcare, education, and hospitality. These discerning individuals seek to reside in luxury villas offering comfort, security, and privacy. They are willing to invest substantially in such projects.

Emerging economic hubs

Thirdly, many small cities and towns have transitioned into economic hubs, attracting new businesses and industries. This transformation has drawn a stream of professionals seeking high-end housing options in these locales. As these industries continue to flourish, the demand for opulent villas in small cities is poised to increase.

Goa stands out when it comes to the rise in demand for fancy homes in the country. In the last 10 years, property value in Goa has gone up. There’s always a need for top-notch rentals as many tourists visit Goa every year. Goa’s real estate is a good money-spinner, with a decent return on investment. In Goa, properties sell fast, taking only 4.5 months on average. You can earn a good amount in rent, which makes Goa a hotspot for fancy homebuyers.

Pandemic-driven paradigm shift

Lastly, the COVID-19 pandemic has accentuated the need for resort-like luxury houses in small cities. The rise in trend for remote working has untethered individuals from the necessity of residing in major cities for work, prompting many to relocate to smaller towns and cities in pursuit of a high quality of life. Yet, the expectation for amenities and luxury lifestyle of large cities persists, fueling a surge in demand for world-class housing units in small cities. 

The current trend of increasing demand for luxury homes in small cities is no fluke. As more individuals seek a better quality of life, and as small cities establish themselves as economic hubs, the appetite for high-end living in these locales is touted to intensify further. Developers capable of offering top-tier amenities and luxury residences in these regions are poised to flourish in this burgeoning market.

(The author is the chief executive officer, and director, Axis Ecorp.)