Luxury real estate demand surges on the back of buyers’ evolving preferences

Several developers in Delhi-NCR and Mumbai have launched ultra luxury projects of late to cater to the requirements of high-networth individuals. Real estate experts say that demand for luxury and ultra luxury properties priced at over ₹5 crore has gone up due to the fear of missing out on new housing project launches as there is less supply chasing high demand. Rich investors are now preferring to buy into large apartments with modern amenities rather than bungalows.
A recent report by CBRE noted that the surge in demand for luxury housing has been on account of a growing preference among affluent buyers for enhanced amenities and more spacious living areas that complement their multifaceted lifestyles. Moreover, the increasing aspirational class has significantly contributed to the increased demand for luxury properties. Furthermore, the rise in NRI and astute domestic investors in the Indian real estate market has considerably fueled the heightened demand for luxury residences, the report said.
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DLF recently pre-launched its 17-acre super-luxury housing project The Dahlias at DLF 5, Gurugram priced at more than ₹80 crore. The company will develop around 420 ultra-luxury apartments in this project. The minimum size of an apartment is 10,300 square feet.
Noida too is fast shedding its image as Gurugram’s poor cousin, so much so that prices of recent luxury housing projects seem to be almost on par with new launches in the millennium city. The city’s premium offerings are being lapped up by people wanting to upgrade from ‘kothi’ living to a ‘condo’ lifestyle, investors, non-resident Indians, not to mention entrepreneurs who have made it big in the industrial town. The County Group’s project in Sector 115 offers apartments in the range of ₹9 crore to ₹13 crore. The size of apartments vary from 4700 sq ft to 7000 sq ft. Gaurs Group is also planning to launch an ultra luxury project in Noida. The company recently launched a ₹3,100 crore worth luxury housing project in Ghaziabad that got sold in just three days.
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The luxury housing segment that includes units priced at ₹4 crore and above saw sales increasing by almost 37.8% Y-o-Y during the Jan-Sep 2024 period on the back of high demand, CBRE South Asia Pvt Ltd said in its report titled India Market Monitor Q3 2024 – Residential.The total sales of luxury units during the Jan-Sep 2024 period stood at around 12,625 compared to around 9,160 units during the same period last year.
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In terms of quantum luxury residential unit sales, Delhi-NCR topped with sales of around 5,855 units, a 72% Y-o-Y increase, followed by Mumbai at around 3,820 units, recording 18% Y-o-Y growth, the CBRE report noted.
In the Jul-Sep’24 quarter, the luxury housing segment across the top cities registered an 82% Y-o-Y increase in sales. The quarter witnessed total sales of around 4,360 luxury housing units compared to around 2,390 units during the same quarter last year. During the quarter, cities including Delhi-NCR and Mumbai predominated housing sales, collectively accounting for about 90% of total sales. Moreover, Kolkata saw a notable 1.6-fold increase in luxury residential sales, the report showed.
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This trend aligns with the shift in buyer preferences towards high-end units launched by leading developers, as evidenced by the substantial market share of tier-I developers. This shift is anticipated to persist, reflecting the evolving expectations of contemporary homebuyers who are now more discerning and informed regarding developer reputation, execution capability, and financial stability, the report said.
Overall, over 225,000 housing units were sold during this period. The steady demand has encouraged developers to introduce new projects and additional phases, adding approximately 215,000 units to the market. Mumbai, Pune, and Bengaluru collectively represented 64% of total sales between January and September 2024, the CBRE report showed.
“India’s luxury housing market is witnessing significant growth, reflected in an increase in sales. We also foresee heightened demand in the high-end and premium segments, with traditional mid-range markets like Noida, Bengaluru, Pune, and Chennai increasingly gravitating towards luxury developments. As the market shifts from bungalows to modern apartments and penthouses, the premiumization of amenities will be a key differentiator in luxury projects,” said Anshuman Magazine, Chairman and CEO – India, South-East Asia, Middle East & Africa, CBRE.
Another report by Anarock showed that a total of 25 ultra-luxury homes priced more than ₹40 crore were sold in Mumbai, Hyderabad, Gurugram and Bengaluru in the first eight months of 2024 for a collective sales value of approximately ₹2,443 core.
Of the 25 ultra-luxury properties sold across the top cities in 2024 so far, Mumbai alone sold 21 units collectively worth ₹2,200 crore – an 84% share of the total deals in this segment across the top cities. At least two separate ultra-luxury home deals collectively worth ₹80 crore were closed in Hyderabad’s Jubilee Hills. Gurugram in NCR witnessed one ultra-luxury home sold for ₹95 crore, while Bengaluru also closed one deal worth ₹67.5 crore.
Of the 25 deals closed across cities this year, nine were of large ticket sizes worth over ₹100 crore each, and a collective sales value of ₹1,534 crore. Contrastingly, the whole of 2023 saw 10 such large deals for a collective sales value of ₹1,720 crore, the data showed.
Apartments remained the preferred property type for HNIs. Out of the total 25 deals, 20 were for apartments and the remaining five for bungalows. Of the total of 25 ultra-luxury homes sold in 2024 so far, at least 20 were high-rise apartments worth approximately ₹1,694 crore. The remaining five sales were of bungalows cumulatively worth about ₹748.5 crore, Anarock data showed.
At least 80% of the total deals were concluded by businessmen, and 12% by senior professionals from across various sectors. Bollywood celebrities and leading legal and medical professionals accounted for the remaining 8%, it said.
Amid the rise in demand for ultra-luxury trophy homes in the last two years, Mumbai tops the list of cities with maximum sales of such properties, despite it being by far the most expensive residential market in India. The financial capital unfailingly attracts HNIs and ultra-HNIs who buy ultra-luxury homes for investment, personal use, or both.
Of the total 25 deals, at least nine deals in 2024 were worth more than ₹100 crore each. All these were transacted in Mumbai – seven in South Central Mumbai and two in Bandra and Juhu, the Anarock data showed.