Mumbai Luxury Housing Market
Luxury housing has witnessed a steady growth in Indian realty. Also, rapid globalization and evolved consumer tastes has led to a seamless inflow of global lifestyle trends. Shubham Singh gives an outlook on this niche market segment in Mumbai.
As per a report by Ernst & Young and Kotak Wealth Management, the number of ultra-high net worth individuals in India, which was 1,17,000 in 2013-14, is projected to nearly triple to 3,43,000 by 2018-19. In sync, luxury housing despite sluggish real estate market conditions continues to grow at a faster pace. This suggests that the rich consumers are just not content with any kind of homes. Other factors driving the demand are the rise in per capital income, the rising GDP of the country and the increase in high net-worth individuals.
Undoubtedly, Mumbai, the financial capital of India is the hub of luxurious homes. The city is the fastest growing real estate market in India, with luxury housing being the most dynamic and vibrant segment. The rapidly growing urbanization, incursion of luxurious lifestyle among the middle income group and more NRI’s getting attracted to investing in India has encouraged the city developers towards undertaking luxury housing projects.
Features of Luxury Housing
The definition of luxury homes has changed in recent times. The buyers see their homes as a calling card and want the homes to reflect their financial and social status. Till early 2001, luxurywas perceived to be the pin code or prime location but, in the last few years’ luxury has seen a transition and advent of high end technologies, international brand associations and boutique or customised homes. Thecity is home to multinationals and HNI’s who are willing to pay big bucks for a spacious apartment that comes with intelligent technology, landscaped terraced gardens and private lounges. Ashok Mohanani, Ekta World elucidated, “The last decade has seen a complete transition in buyer’s perception while investing in property.The luxury homes come with a combination of top-quality imported interiors, international designer bathroom fittings and semi equipped kitchens. Other aspects that cater to the growing appetite of the super luxury home include, Olympiad and infinite swimming pools, water bodies, hanging gardens and meditation centres, digital locks, home automation and electronic surveillance system to name a few.”
The amenities provided by a developer in an ultra-luxury residential are world class and effectively come at a high monthly out-going as they areeffectively maintained like 5-star hotels by a reputed facility management.
According to Hiral Sheth, Director-Marketing, Sheth Creators, the most in demand is the technology like temperature control, automated door lock, electronic appliances, lights and music, security systems, fire detectors, fully automated homes and elevators security card for selective access. “The owner can also link the house system with their smart phones which gives them access to control all the features from anywhere in the world,” she added.
The macro economic trends have created a positive impact in the demand for luxury housing. Developers are looking forward to tap new locations everyday which is giving them the opportunity to expand the development boundaries.
Developer’s inclination towards luxury residential market
The Mumbai real estate has undergone sustained and robust changes in the luxury living space, fuelled by the dynamic NRI’s and HNI segments. Worli remains the most sought after destination Apart from very good social infrastructure and connectivity, it also enjoys good connectivity to the central and secondary business districts like BKC, which is Mumbai’s de facto CBD now.Some of the other preferred locations for luxury housing are Malabar Hill, Napean Sea road, Colaba, Cuffe Parade, Beach Candyand the new destination- Lower Parel. “Developers are inclined to build ultra-luxury apartments as the profit margins are high but this segment at present is under serviced. The cycle is currently at the low end today but is ready to bounce back soon,” said Harjith D. Bubber, Managing Director, Rivali Park, CCI Projects.
Adding to the same, Parth Mehta, Managing Director, Paradigm Realty pointed out the fact that every developer has an inclination to develop a top-notch project. ”Developer is an entrepreneur and aims to deliver a good proposition for a better price.The concept of luxury has evolved over period of time. The amenities and features which were a luxury a few years back are considered a necessity today. With the growth of the economy, changing lifestyle and demand for a project with aspiration value every developer is propelled to include more of premium lifestyle amenities in his project.”
Trend of Branded Homes
Nowadays, celebrity endorsement has become a fashion for promoting luxury projects. Among several other marketing strategies, it has taken a driving seat in attracting buyers.“The consumer or the target market generally tends to relate better when a public figure is associated with a brand. Also the fact that the luxury real estate is of a higher value and a big-ticket investment, the celebrity endorsement helps add greater poundage,” agreed Mohanani.
Apart from the movie celebrities and sportspersons, international designers are being roped in to conceptualize the luxurious homes like Lodha Group partnering with Italian designer Giorgio Armani’s interior design studio. Giving the reason Mehta stated, “A celebrity endorsement of a project, changes the entire brand perception of that development. It enhances the brand recall value which translates into increase in inquiry for the project. It’s an important marketing tool which enhances the glamour quotient of the project.”
India is increasingly attracting celebrities and major brands to team up with the developers for giving their residential space a niche quotient.Bubberfeels, it is safe to go for thebranded product because the reason a celebrity has lend his or her name to it is because the product has an established market value. “When celebrities endorse a project, they keep their brand image firmly in mind,” he said.
Mumbai has a huge potential for branded homes taking into consideration the growing aspirations of home buyers. The forthcoming years will witness the maturing of concept of branded homes. As Sheth rightly puts it, “The demand of branded residential space is definitely there but what is of utmost significance is to align these products to the needs of the customers.”
According to the Asia Pacific 2016 Wealth Report, India is home to the fourth largest population of millionaires in the Asia Pacific region, with 2.36 lakh such high net-worth individuals.
The Years Ahead
The future of luxury market is going to change with the new trends coming up driven by the aspirational young entrepreneurs but the economic fluctuation also plays a key role in deciding the fate of luxury houses. The downturn disturbs the sale of these houses which results in drastic conditions for the developers. Moreover, every luxury home buyer in Mumbai wants a piece of location which offers all the facilities in the heart of the city. This in turn has created shortage of space in specific localities. Still, from the investment point of view, luxury homes segment is where developers and investors alike can look at for profit margins. As Mohanani said, “The coming years will see a significant demand for luxury living spaces amongst HNI’s and NRI’s as they also consider it an apt investment opportunity with multiple returns in the future.”
Right now Mumbai luxury housing market is going a bit slow, but the way India is growing and developing, it seems the luxury segment will come back. Corroborating the sentiment Bubber said, “There is money and the buyers want to invest in the luxury segment. In a year or two, the luxury residential market will see a surge of investment.”The most pertinent limitations faced by the luxury residential segment are, the time period for the approvals and the high maintenance costs of the property.The silver lining is the growing interest of the foreign investors and increase in the young high-salaried consumers. Mehta reinforcing the high hopes for this segment stated, “India being the fastest emerging markets in the world will see growing numbers of HNIs and demand for aspiration value projects.”