Demand for luxury homes slow, builders hope for recovery

New Delhi, May 13 (PTI): The demand for luxury homes has slowed down during the last one-and-a-half months due to the second wave of COVID-19 but real estate developers and consultants are hopeful that sales will pick up once situation normalises as it happened last year.
Prices of luxury residential properties are likely to remain stable and may even rise slightly due to limited supply, they said.
Amit Diwan, Managing Director and Country Head, Hines India, said: “All our residential projects have seen strong velocity and price performance during January-March 2021.”
Residential buyers want good-quality larger units from reputed developers, he said.
“We expect that with a hybrid work model here to stay, these trends will continue. Going forward we remain optimistic that the uptick in demand will continue once the second wave settles down,” Diwan said.
Amit Goyal, CEO, India Sotheby’s International Realty, said the demand for luxury and spacious homes went up significantly across the country post the first phase of COVID-19. Goyal said the January-March 2021 quarter at India Sotheby’s International Realty, one of the leading brokerage firms in luxury segment, was the strongest both in demand and transaction closures.
“With the current lockdown, yes there’s a short pause, but we believe that the buying momentum will make a big comeback, just as it did last year when the COVID situation normalised,” he said.
Given the limited supply in this segment, he said property prices rose in some pockets, if not all, last year.
Goyal does not expect sharp rise in prices but some firming up in price could be seen.
Reeza Sebastian, President – Residential Business, Embassy Group, noted that real estate has evolved as a preferred investment class in 2020, with growing interest towards the luxury housing segment not just from Indians but also from NRIs.
“Luxury residential prices across key markets have remained stable, witnessing a steady recovery path. There have been no new launches in the Rs 3 crore plus category in the last couple of years, contributing to the stability in prices through sustained demand,” she said.
Sebastian said luxury home buyers prefer projects by branded developers and ready-to-move-in properties where quality can be assessed first hand.
“With developers continuing to receive interest from HNI’s, the demand for luxury residences is bound to see a sustained growth going forward,” she said.
On demand outlook, Mani Rangarajan, Group COO, Housing.com, Makaan.com and Proptiger, said “a lot will depend on how the Covid second wave behaves and how quickly the citizens are vaccinated.”