By: Shreyans Shah, Managing Director, MJ Shah Group
There is a growing demand for luxury homes across markets in the country, post the pandemic. We can attribute this to a number of factors namely; pent up demand, Work from Home (WFH) concept, reduced stamp duty and low home loan rates. The pandemic may have impacted the real estate market, but the aspiration with which people are turning to luxury homes is quite unprecedented, especially in Mumbai, where such residential properties are selling like hot-cakes in established neighbourhood areas of SOBO, Worli and Bandra.
Kicking away the pandemic blues, many real estate majors have started selling luxury residential properties in Mumbai that can proudly wear the ‘luxury’ tag. There is also an increased demand from NRI and HNIs to invest in luxury properties here at home, due to ready-to-move in stock available in the property market and that too at competitive rates. Also, with Covid impacting the stock market, HNIs are investing in luxury property as they believe it to be a safer investment option.
The pandemic in fact has changed the entire way we live and work. With lockdowns in place and most people being forced to work out of their homes, it has become apparent that this is going to be the new norm, going forward.With the pandemic making us work from home, one thing is pretty clear – a home should be spacious. And with the luxury tag, having open spaces in modern homes is a must. A home should have a separate nook where you can carry your business, allowing you to stay connected to your office even without having you to step out of the house.Humans, being the most adaptable of primates, have very quickly learnt to adjust with this new normal. WFH has in fact been instrumental for people now looking at moving into larger and luxurious spaces, which provides workspaces along with health amenities like gyms, jogging tracks, swimming pool etc.
Most home buyers looking at buying a larger and more luxurious home are taking advantage of the reduced stamp duty rate which has come down from 5% to 3% effective till March 31, 2021. This has created a flurry of activity among luxury home buyers who see this as the most favorable time to invest in a luxury property. This is a significant saving to them to final cost of the property. This coupled with low home loan rates, pent up demand, and has had a cascading effect to the overall property market across property segments. What’s fuelling buyers towards these luxury homes cannot be attributed to one particular factor. But feeling the pulse of the market, there is a significant increase in the demand post the lockdown. Buyers who had plans to buy a luxury home have now gone ahead with the purchase.
Interest rates for housing loans are at a historic low, with premier lending institutions offering attractive home loan options in the range of 6.75% to 7.5%. Home loans at prevalent interest rates allow for considerable savings while creating an asset for the purpose of end-use or investment. In fact, a lower interest rate provides borrowers with an option to raise the loan amount, helping broaden their choice for a more luxurious property, inclusive of finer amenities and lifestyle facilities in premium neighborhoods.
The NRI community too are seeking to take advantage of reduced stamp duty rates coupled with depreciation of the Indian Rupee vis-à-vis the US Dollar. This makes the US Dollar stronger against the Indian rupee, increasing the purchasing power for the NRI. With RERA in force, NRIs are feeling more confident about the transparency factor in dealing with Indian developers. This has boosted their confidence to go ahead and invest in their luxury home, here in India.
The luxury housing market has caught the fancy of the upper middle income group as well. Caught between a pandemic, they are now ready to stretch their budgets for a more luxurious home that caters to the whims and fancies of the entire family. They are now less, price conscious as they look forward to getting larger spaces that have their own personal gardens or balconies for a sit out and this bodes well for maintaining health of mind and body. Over the last few decades, the concept of luxury has become an integral part of the Indian landscape. Similarly, luxury apartments which were quite scarce, have now become a fashionable address and statement for the rich and the aspiring upper-middle class. Whether it is real estate, automobile or personal possession items, luxury is here to stay, as people aspire for better living.
In Mumbai, Bandra, Malabar Hill and Worli are some of the most sought after luxury property destinations in the city. Apart from location advantage; being in the heart of the city and in close vicinity to business hubs and entertainment centers, these neighborhoods have a snob value attached to them, making them the most desired by luxe home buyers.