Millennials want it all. High-end finishes, the rooftop deck, and the smart home technology that lets you control everything from your phone. Admit it, you’ve fantasized about living in one of those luxury apartment towers popping up in cities across the country. Turns out you’re not alone. There’s a whole generation fueling the demand for luxury housing, i.e., Millennials.
Sustainability and experience are also high on your list of priorities. Developers are taking notice and churning out residential properties packed with everything your generation craves. For better or worse, the rise of luxury housing is here – and millennials are driving it.
But, do we all really know what luxury housing actually means? Let’s put a light on it.
What Counts as Luxury Housing?
Luxury housing is typically the top 5-10% of homes in a given market in terms of cost. While that varies significantly by location, you can expect to pay at least 50-100% more than the median home price in your area. For the ultra-luxury tier, make that 200-500% more.
So, what exactly counts as luxury housing these days? Simply put, it’s residential real estate that goes above and beyond the average in terms of design, amenities, and price point. We’re talking high-end homes with premium features like:
• Custom architecture and lavish interiors with high-quality materials.
• Smart home technology like automated lighting, thermostats, and security systems.
• Resort-style amenities such as pools, gyms, spas, golf courses, and private parks.
• Concierge services and 24/7 security.
• Prime locations in affluent neighborhoods or secluded, gated communities.
Also Read: Financial benefits of investing in freehold property
Growth Rate & Reports: The Luxury Housing
The luxury housing market in India continues to witness impressive growth, as stated in CBRE’s ‘India Market Monitor Q1 2023’ report, for the second consecutive year. The report highlights a remarkable year-on-year increase of approximately 151 percent in luxury housing sales between January and March 2023.
Delhi-NCR emerges as the frontrunner in luxury housing sales, experiencing a staggering 216 percent growth in Q1CY23 compared to Q1CY22. Additionally, cities like Mumbai, Hyderabad, Pune, and Kolkata also demonstrate substantial demand and traction for high-end real estate units.
These findings indicate the strong appeal and market potential of luxury housing across various Indian cities, reflecting the preferences and aspirations of discerning buyers seeking premium living experiences.
Crisil, a leading rating company, reported a remarkable surge in sales by large listed real estate developers. The value of sales increased by almost 50 percent in FY23, while the area sold witnessed a growth of approximately 20 percent. As a result, these prominent developers are projected to expand their market share to around 30 percent in FY24, a significant increase from 16-17 percent in FY20.
In addition, according to a recent report by Anarock, the luxury housing market in India saw a significant decline in unsold units. The number of unsold units priced above Rs 2.5 crore decreased by 24 percent, reaching 15,520 by the end of March, compared to 20,480 units the previous year. This indicates a positive trend in the luxury housing sector.
Why Is Luxury Housing Demand Surging??
There’s no question that demand for luxury homes is surging. If you’re the recent generation, you probably want it all.
The following are the factors attracting everyone to Luxury Housing:
• Millennials desire convenience, sustainability, high-tech features, amenities, and status in their homes.
• Luxury housing offers desirable locations near work, dining, and entertainment.
• Eco-friendly and energy-efficient materials and systems for a lighter environmental footprint.
• Standard smart home features like automated lighting, learning thermostats, and voice assistants.
• Resort-style amenities such as pools, gyms, and lounges are common.
• Luxury homes serve as a symbol of success and achievement.
How Millennials Are Driving the Luxury Housing Sales
Indian millennials represent a pivotal consumer group in the marketplace. Currently at the height of their purchasing power and with easy access to home loans, this demographic has significantly influenced the housing market. In 2020, over 50% of homes sold were attributed to them, with their influence propelling the Indian real estate market to surpass a 54% growth rate in 2022.
By evaluating these escalating trends, it’s projected that the Indian real estate sector will swell to over 1 trillion dollars by 2030. This growth is expected to account for an impressive 13% of the nation’s GDP. In essence, the buying power of Indian millennials has not only reshaped the real estate landscape but is also set to contribute significantly to the economic growth of the country.
So, there you have it, the inside scoop on how millennials are fueling the rise of luxury housing. If the trends continue, luxury living may become more mainstream and attainable. For now, though, living in a luxury home remains an aspiration for many. If it’s within your budget and aligns with your lifestyle priorities, go for it. Treat yourself to the tech-savvy conveniences, eco-friendly features, and amenities that make day-to-day living more enjoyable.
(By Saransh Trehan, Managing Director, Trehan Group. Views are personal)