The real estate market, in general, has been going through tough times across India. The unsold inventories across major cities like Mumbai, Bangalore, and Gurgaon have piled up over the last three to four years. This blog is not about the past. We are going to touch into the luxury segment real estate market in Chennai. Before we dive into the Luxury market segment, you should know that despite the slump in the Indian economy, the Southern Indian Real Estate market has displayed tremendous resiliency. Chennai logged in a 25% increase in sales in the first half of 2019.
Significance of the Luxury segment
There is a significant difference as to why people go for Luxury Residential Real estate. While the other segments are based on value, ROI, etc., this segment bears a testament to their lifestyle. This niche end-user segment considers them as a matter of pride that glorifies their lifestyle.
As a result, location plays an instrumental role since they are considered as an aspect of power that influences the end-users. For example, in Chennai, the highest concentration of luxury residential real estate are focused on and around Anna Nagar, Nungambakkam, RA Puram, etc. But now OMR has come under the spotlight as it carries numerous luxury apartments.
Classification of Luxury according to Chennai end-users
The definition of Luxury has taken a new trend. Its paradigms have shifted. In Chennai, affordable Luxury is gaining popularity as they target an upper-middle-class segment.
And then there is the Ultra Luxury segment. Ultra Luxury typically starts from 2.5 Crs, while the affordable luxury lies in the 80L-2 Cr range.
Luxury segment: Statistical Analysis
Let’s take a look at the luxury market segment statistics. In H1 2019 (Jan-June), 7762 new housing units were launched.
- 9% of the projects were in the 80L-1.5Cr budget segment, which is considered an affordable luxury.
- The 1.5Cr-2.5Cr segment witnessed 3% of the projects
- The >2.5Cr segment too witnessed the same.
- 18% unsold inventories- 80-1.5Cr budget segment
- 4% of unsold inventories- 1.5Cr- 2.5Cr budget segment
- 4% of the unsold inventories- >2.5Cr budget segment
Q2 (Apr- June)
- 17% of the new launches- 80-1.5Cr budget segment
- 5% of new launches- 1.5Cr- 2.5Cr budget segment
- 3% of new launches- >2.5Cr budget segment
- 18% unsold inventories- 80-1.5Cr budget segment
- 5% unsold inventories- 1.5Cr- 2.5Cr budget segment
- 4% unsold inventories- >2.5Cr budget segment
How is the future of the Luxury segment shaped up?
1. Location – Location may not be the only criterion but remains a primary source of influence when it comes to the Luxury segment.
Prestige Silver Springs- Sholinganallur, Prestige Bella Vista- Porur, SPR- Perambur, Akshaya Level up- Nungambakkam, Brigade Xanadu- Anna Nagar, Adroit House of Ambal and Express exclusive- Anna Salai are some of the luxury properties preferred due to their strategic location.
2. The rise of Affordable Luxury- As mentioned earlier, Affordable Luxury will accelerate as they connect popular areas, packed with modern amenities. It has grown immensely popular with the middle-class segment as they will be efficacious in sufficing their lifestyle aspirations.
Emami Tejomaya, Godrej Azure, Akshaya Tango, TVS lighthouse, Radiance the pride are some of the noteworthy apartments in this segment.
3. Technology and Automation- Technology will be another trend that will shape the Luxury segment. Builders woo people with integrating IoT electronic devices that transform a house or an apartment into smart homes. Controlling electrical devices with a remote or a mobile app has become a new popular trend. Smart Technology has even become synonymous with Luxury. Sophisticated automation features coupled with security and energy management, will pose a veritable affinity for buyers.
All luxury apartments come with home automation which is one of their key highlights.
4. Design- One of the influential factors which set a Luxury residence apart from the other residences is the exquisite and the contemporary design along with branded gyms, spas, and sports amenities.
5. Brand- A brand is a symbol of trust. So people are invariable inclined to go with the brands they trust even if requires them to shell out a couple more bucks.
Hiranandani, Prestige, Shriram are some of the trusted builders and their properties are most sought out by buyers.
The rise of NRIs in the Indian Luxury Real estate market
NRIs and high net worth individuals are slowly making a return to the real estate market, assisting to ramp up sales of luxury and ultra-luxury homes, a study has suggested. The market has been stagnant for a very long time and there is an opportunity for investors to enter into the real estate space
Since the value of rupee has declined, the NRIs are venturing into the Indian Real estate markets again. As they present significant investment and retirement opportunities, NRIs will a major player in the luxury segment.
Prediction of the Luxury segment
The Luxury realty segment is currently observing an addition of new launches and deploying extra resources to siphon off the unsold inventories. As the Indian stature grows, the Luxury market segment will witness further evolution and growth.