The Indian real estate industry experienced a notable buoyancy in 2023. Despite the gradual rise in interest rates for home loans and persistent global economic challenges, the residential market, recognised for its promising potential, has successfully emerged from the dark cloud of the pandemic. Contrary to several gloomy forecasts for the residential sector periodically in the past, it has surpassed expectations, showcasing robust recovery figures in 2023.
A Remarkable Shift
The country’s residential market witnessed a remarkable 20% Year-over-Year (YoY) uptick in new supply in 2023, with around 517,071 residential units launched during the period. Interestingly, a substantial concentration of new supply of homes was observed in in the INR 1–3 crore and above price bracket. According to our data, a significant 31 percent of new supply in 2023 was dedicated to this segment, as compared to 28 percent in the previous year 2022, indicating a changing trend in the preferences of homebuyers.
Another striking revelation is the surge in demand for properties falling within the INR 1–3 crore and above price bracket, that garnered a notable 24 percent share of sales, a noteworthy leap from the pre-pandemic average of 10–15 percent. Our recent consumer sentiment survey also validates this trend, the budget category observing a 7.5-fold jump in the high-intent online search activity for premium properties in 2023.
This shift underscores a changing pattern in the mindset of homebuyers, with a growing desire for upscale residences that offer not just living spaces but an entire lifestyle experience.
Key Drivers Spurring Demand in the Segment
The primary drivers behind this surge in demand are the increased desire for larger spaces in quality projects and a heightened focus on liveability factors. The recent global pandemic has reshaped the way individuals perceive their homes, evolving from mere shelters to multifunctional spaces that accommodate work, leisure, and personal well-being. Thus, the demand for high-end homes reflects a quest for larger living spaces that can seamlessly blend functionality with luxury.
Aspirational Shift in Lifestyle
High-end homes are often associated with branded projects situated in prime locations, offering exclusive services and state-of-the-art amenities. The pull of these properties lies not only in the physical space they provide but also in the lifestyle they promise.
The discerning homebuyer of today seeks not just a residence but an elevated living experience, complete with concierge services, top-notch security, and recreational facilities.
Our recent consumer sentiment survey corroborates this trend, revealing an increased inclination towards transitioning to more expansive living spaces. Respondents cited the desire for a dedicated home office, recreational areas, and private outdoor spaces as key considerations influencing their choice of residence. This shift in preferences aligns with the broader trend observed in the market, indicating a clear demand for high-end homes that offer a holistic and enriching living experience.
Higher Cost
The growing preference for larger homes often come at a higher residential cost. The increased size and floor area, coupled with other factors such as developer reputation and project exclusivity, contribute to the perceived value of high-end homes. This is reflected in the concentration of new supply and increased sales in the INR 1–3 crore and above price bracket.
Summing Up
In conclusion, the surge in demand for high-end homes signifies a significant shift in the dynamics of the residential market. The desire for larger living spaces, coupled with an increased focus on habitability and lifestyle amenities, is reshaping the concept of homebuying. There is undoubtedly a heightened appreciation for spacious, well-designed living spaces that cater to both professional and personal needs. As the real estate landscape continues to evolve, the coming years are poised to witness a more pronounced trend towards high-end homes, marking a new era in residential living
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