Top Four Indian Cities To Find Luxury

The real estate sector in India has faced a slowdown in the past two years and is still on its way to recovery. Even as the Centre gears up to fully implement the Real Estate (Regulation and Development) Bill, 2016, which is expected to revive the sector, recent data indicate the many hurdles that are keeping the market grounded.

Times like these might be challenging for all stakeholders, but there are some bright spots as well. For instance, this may be an opportune time for home buyers to own a piece of luxury real estate for less, as large inventories and sales slowdown typically present sweeter deal.

Why should you buy?

Sales demand: According to a recent PropTiger DataLabs report, the luxury segment accounted for 28 per cent of the total housing demand across India's nine major cities in the January-March quarter of 2015-16. Units worth over Rs 75 lakh apiece fall in the luxury segment. The cities covered in the report were Ahmedabad, Bengaluru, Chennai, Gurgaon (including Bhiwadi, Dharuhera and Sohna) , Hyderabad, Kolkata, Mumbai (including Navi Mumbai and Thane) , Noida (including Greater Noida and Yamuna expressway) and Pune.

Price trends: Property prices across the nine cities saw only marginal or negative growth during the quarter. This shows luxury remains affordable for the time being.

Inventory: In some cities, the luxury housing segment accounted for a major part of the total inventory in the January-March quarter. This indicates that buyers have plenty of options to choose from, even as price growth remains subdued.

Where should you buy?

PropGuide lists four cities that are the most lucrative for luxury real estate investments at present:

Mumbai

In India's financial capital, where real estate is among the most expensive in the world, the prices of affordable units are close to those of 'luxury' ones in other cities. According to the DataLabs report, 33 per cent of the total housing demand in Mumbai was in the luxury segment. Now, the answer to whether you can have a luxury house in Mumbai for Rs 75 lakh is positive. How so? The luxury housing segment in the city forms 41 per cent of the total inventory, which means there is plenty of stock developers are in a hurry to sell. So, there could be an opportunity to seal a great deal, and even avail of some attractive discounts. What's more? Compared with the same quarter of the previous year, property prices in Mumbai have seen growth of only two per cent. It may not get better than this for real estate in India's commercial capital.

Gurgaon

The real estate market in the millennium city, known for its plush villas and luxury residential and commercial housing, has been in the slow lane for a while. Sales figures have dropped, and prices have remained stagnant. What else? There is a huge inventory, too. According to the DataLabs report, 26 per cent of the total housing demand in the city in the March quarter was in the luxury segment. But 39 per cent of the city's overall inventory is in the luxury segment. On a year-on-year basis, property prices in Gurgaon witnessed a decline of five per cent. So, if you want to own a luxury residential unit in the city, this might be the time for you to start calling your property advisor.

Bengaluru

There are many reasons to explain why India's information technology (IT) capital is seeing a rise in demand for luxury housing. The many IT majors that have set up shop in the city are attracting well-paid working professionals in great numbers. Now, according to the DataLabs report, nine per cent of the total housing demand in Bengaluru was in the luxury segment in the fourth quarter, while luxury housing stock accounted for about 33 per cent of the total inventory. However, the real estate market in Bengaluru is among the top performers in South India, and property prices here have grown three per cent y-o-y. Buying luxury in Bengaluru may just get costlier in the coming future.

Hyderabad

When you think Hyderabad, you think affordable. However, the city has grown and is the new entrant in the luxury block. Demand for luxury housing in the city is picking, with seven per cent of the total demand in Hyderabad coming from the luxury segment in the March quarter, according to the DataLabs report. By comparison, the luxury housing stock accounts for 40 per cent of the total inventory. Given this, Hyderabad could prove a perfect example of 'supply generating demand'. However, real estate prices in the city saw a year-on-year growth of six per cent – the city was on top of the heap among the nine real estate markets in terms of price appreciation. Any delay in deciding on buying a property here may cause you to spend more later.