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This article is more than 1 month old.

Why now is the best time for HNI, UNI's to invest in luxury real estate

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Luxury connoisseurs are looking to invest into residential units, which stand out from the general and have a niche for themselves. Sales of luxury housing is on an upward trajectory this year and here is why this may be the best time for NRI’s and HNI’s to invest in the luxury real estate market

Why now is the best time for HNI, UNI's to invest in luxury real estate
The years 2020 and 2021 have been watershed years for the Indian real estate sector. Residential estate showed great resilience during the pandemic and having showcased green shoots early, it is expected to grow further due to the ongoing positive market sentiment. The luxury and the ultra-luxury segment, which had been stagnating for quite some time, saw a sharp revival owing to an accommodative stance from the developers and the government. The number of high-net-worth individuals in the country along with the purchasing power of these individuals has inevitably increased in the past couple of years due to the steady rise in the exchange rate of the US dollar.
The last two years have also influenced consumers across segments to re-assess the need for bigger homes. The ultra-premium segment witnessed an increased demand for luxury homes that offer experiences of the highest standard. There is an escalated need for large green and open spaces, gardens, home offices and recreational areas. Residences that offer the best-in-class services, bespoke curated experiences and top-notch amenities offering a superior quality of life are observing high demand.
Luxury connoisseurs are looking to invest into residential units, which stand out from the general and have a niche for themselves. Sales of luxury housing is on an upward trajectory this year and here is why this may be the best time for NRI’s and HNI’s to invest in the luxury real estate market:
I. World-Class Designs
The pandemic has prompted the reconfiguration of the design and layout of homes. Real estate developers in India are roping in internationally acclaimed designers and architects to keep with the growing aesthetic demands of the buyers in the luxury homes segment. ‘Modern designs with the inclusion of the best available technologies’ as well as ‘aesthetic and ergonomic designs customized to the Indian needs’ are being created by developers for luxury homes.
II. Thoughtful Amenities
The health and wellness concerns amid Covid-19 have reaffirmed the significance of homes as an address to ensure overall well-being. Developers are now creating state-of-the-art amenities with provisions for outdoor spaces. The push for creating sustainable developments has also forced the real estate industry to maintain and expand verdant greenery and exemplify eco-friendly amenities.
III. Investing in a sustainable future
People are now recognising the importance of sustainable and environment-friendly developments. The pandemic has encouraged developers to create thoughtfully designed projects with lower carbon footprints ensuring delivery of future-ready developments. The developers are also targeting to achieve certification from national councils like the Indian Green Building Council (IGBC) as well as globally recognised symbols of sustainability achievement and leadership like LEED certification.
IV. Rise of Branded and Organised players
Brands with strong positioning have always been at an advantage in a crowded marketplace. In the real estate industry, these Branded players bring a track record of on-time as well as quality project completion reducing the risk and greatly increasing transparency. With the rise of regulatory reforms like RERA, GST, etc., the real estate market is becoming increasingly biased towards developers who can comply with the transparent way of working. Timely delivery and transparency have become hygiene factors and product innovation & thoughtfulness, quality etc. are becoming key differentiating parameters.
V. Low-interest rates
Mortgage rates are at an all-time low. These low rates provide people with an added incentive to buy homes or invest in real estate since there is a considerable difference between the mortgage rates and the opportunity cost of capital like in investing in equity markets, etc. In a year of slow growth, the accentuated demand points towards the fact that investor activity in this segment is also increasing.
A culmination of all these reasons identifies why the premium and luxury real estate market is a prominent proposition for luxury investors. There is accentuated growth in the sector further offering bountiful returns. Hence, now is the right time to invest in this market!
—The author, KT Jithendran, is CEO, Birla Estates. Views expressed are personal
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