JJL has recently published a report projecting that robust demand alongside high-quality launches will drive India's residential sector to achieve sales figures between 290,000 and 300,000 units. The premium segment, in particular, has witnessed an impressive 22% surge in sales, while the mid-price category has dominated overall sales statistics. Recognizing this trend, developers are actively launching new projects to cater to the evolving market demands, resulting in an astonishing 83% increase in sales within the luxury segment. Contributing factors include shifting consumer preferences and notable technological advancements, leading to a heightened demand for luxury real estate across India.
Moreover, the stigma surrounding the COVID-19 pandemic has compounded this trend, as affluent buyers increasingly favor large luxury homes that offer secure and convenient living environments.
The Rise of the Affluent Class
In the previous year, millennials represented 54% of India's homebuyers and account for 36% of the population, boasting an impressive combined spending power exceeding USD 330 billion. With their disposable incomes on the rise, many millennials are turning to luxury real estate to secure larger, more comfortable homes; consequently, the sales of high-end properties in the nation’s top seven cities have skyrocketed, witnessing a five-fold increase from 2018 to 2023.
Several studies indicate that Mumbai, the financial powerhouse of India, has cultivated more millionaires than even Rome, thanks to global wealth managers and private equity firms. The emergence of this young, affluent demographic is likely to significantly influence the Indian real estate landscape.
Similar trends have emerged in a survey by Sotheby’s International Realty, which reveals that an increasing number of wealthy individuals—particularly NRIs—are contemplating investments in luxury properties in India. The aspirations of this burgeoning affluent class for superior amenities, ample living space, distinctive architectural designs, prestigious addresses, lifestyle enhancement, and high returns on investment are driving the demand for luxury homes in light of these developments.
Additionally, the surge in NRI involvement highlights a growing confidence in India's real estate sector, spurring a stronger inclination to invest in premium and luxurious properties, particularly concentrated in regions like Goa, Mumbai, and Delhi-NCR.
The Luxury Outlook Survey 2024 unveils fascinating insights; specifically, it indicates that a significant majority of buyers considering vacation homes are inclined towards Goa as their preferred second-home locale.
Let us scrutinize some of the appealing characteristics of Goa's real estate that attract both HNIs and NRIs alike.
The breathtaking landscapes, temperate climate, and harmonious fusion of contemporary conveniences and natural living factors have positioned Goa as India's prime destination for luxury and ultra-luxury properties. Homebuyers increasingly prioritize attributes such as smart-home technology and health-oriented environments, as these not only reflect their social standing but also enhance their work-life balance. The modern buyer no longer perceives spacious homes and comprehensive amenities as mere luxuries but rather as essential requirements.
The recently inaugurated MOPA airport is anticipated to further bolster Goa's connectivity, likely leading to increased flight options and a boost in the tourism sector. Additionally, state-of-the-art healthcare facilities significantly contribute to the burgeoning demand for opulent residences. Sustainability seems set to steer the future of luxury vacation rentals, guiding a focus on building deep relationships with clients while safeguarding the environment.
Goa's unspoiled natural and cultural allure has long attracted tourists, and as the work-from-home paradigm takes root, more people are considering permanent relocation to this idyllic locale. The real estate landscape in regions such as Sindhudurg and North Goa continues to flourish, attracting prestigious villas, second homes, and luxurious housing developments. Amidst this backdrop of rising housing demands, growing income stability, and infrastructural enhancements, these areas are bound to remain sought-after investment spots.
NRIs Find Opportunity in the Profitable Indian Real Estate Market
From 2023 to 2028, growth projections indicate that the Indian luxury real estate market will expand at a compound annual growth rate (CAGR) exceeding 5%. This burgeoning sector is characterized by luxury residential properties that offer innovative amenities and prime locations. In fact, non-resident Indians (NRIs) have been increasingly flocking to India’s luxury real estate market, having invested a staggering $13.1 billion last year. By 2025, NRIs are expected to account for 20% of all real estate investments made within the country.
To build a well-rounded investment portfolio, NRIs are encouraged to strategically consider luxury real estate acquisitions in India given their potential for status acquisition, long-term value appreciation, and their ability to provide a buffer against market volatility. Compelling destinations like Goa are particularly attractive to NRIs, offering competitive pricing, promising rental yields, and ample opportunities for property appreciation.
To cater to the discerning international lifestyle of NRIs, Indian real estate developers are rolling out premium features such as advanced security systems, smart home technology, wellness centers, and top-tier concierge services. The burgeoning partnership between leading developers and NRIs signifies a shift towards India's luxury real estate becoming increasingly sophisticated and globally aspirational.
In summary, the expanding affluent class, which accounts for 36% of India's population, contributed to a significant proportion of home sales in 2017, highlighting their collective spending power exceeding US $330 billion. The Indian economy's attractiveness is driving investment, thus heightening demand and property prices, particularly in trendsetting locales like Goa. Given its exceptional performance within the global economy and political steadiness, India is poised to continue its upward trajectory in the years to come.