By Farshid Cooper, Managing Director, Spenta Corporation
The Indian real estate sector has experienced a huge transformation in the last year, owing to the vast range of reforms and laws put into effect. A volatile lending market, technological breakthroughs and the changing tastes and preferences of the Indian customer, has further contributed to this revolutionary change. This shift in the status quo, has, in turn, highlighted a number of overarching trends defining the luxury real estate sector of tomorrow. More and more customers have begun demanding high-quality, high-comfort features in their homes, aided by technology and innovation, while investors from all over the world have developed an interest in the sector. Enumerated below are five trends that are expected to shape the rapidly growing, Indian luxury real estate sector.
The growth of the affordable luxury segment:
The increased exposure to global standards of living including amenities other and offerings has drastically changed the way the typical Indian customer perceives luxury living and value for money. As a result, there has been a noted rise in the popularity of the affordable luxury concept in real estate. In a nutshell, consumers are looking for luxury homes (in terms of size, amenities etc) at affordable prices. Houses and apartments in this sector are usually equipped with several modern amenities and furnishings and located in popular suburbs that also allow for healthy social infrastructure. This trend will continue to rise, as the affordable luxury segment allows people belonging to middle-income groups to satisfy their aspirations, and afford premium houses equipped with a range of luxury offerings while staying within their budget.
Branded Luxury Homes:
More recently the luxury market has seen the advent of branded luxury homes as something that offers just a little bit more to the discerning consumer of uber-luxury homes. These homes tend to be in the plush locations of the city and attract the very crème de la crème of society. Often, these apartment buildings or complexes are managed and maintained by the very best in the industry and therefore command a premium. These developments are often results of local developers partnering in some way, shape or form with foreign developers, brands or hotel chains. Examples of this include the Four Seasons Residences, The Ritz Carlton Residences, The Trump Residences, Versace Residences etc. From the consumers stand-point, these homes or apartments offer a certain snob value and are therefore will continue to be desirable in the years to come.
Fuelled by the strong push for the adoption of the latest technological innovations like AI, Machine Learning, and more, to improve efficiency and reduce costs in every sector, India is headed for a technological revolution that will transform every industry. As such, smart home automation, which has already gained significant traction, will continue to rise in popularity in the Indian luxury real estate market. That said, I think features like phone enabled operations of lights, geysers, air conditioners etc. which are fairly common already will make way for more advanced features that make living easier and more comfortable especially so in the energy consumption, waste management, water utilization and security and child monitoring space. This change will be further encouraged by falling prices and increased exposure, as these innovative products start being mass produced, improving accessibility, comfort, and affordability.
Innovative designs and architecture:
With the population of urban cities in India on a constant rise, the demand for real estate has only gone up in the last few years. To meet this rapidly rising demand, builders and developers are adopting innovative design philosophies to combat the lack of space. Efficient planning has become the landmark of any luxury home. Conventional principles of architecture have given way to more practical and useful structures. Strategically angled windowpanes, efficient ventilation systems, and innovative construction materials are being used to make buildings more sustainable and more energy efficient. Further, even within homes the use of large passages and foyers in frowned upon and more square footage is loaded to the spaces that tend to get used more such as living rooms, bedrooms, kitchen etc.
A rise in foreign and domestic investment:
The consolidation of the Indian real estate market and the increased transparency offered by reforms like GST, RERA, and MOFA have helped build considerable trust and faith in the industry. As a result, investors and lenders have begun looking at India as a highly lucrative option in the sector. Additionally, India’s Tier-I cities occupied the 36th rank in JLL’s 2016 bi-annual Global Real Estate Transparency Index, as a result of improvements in structural reforms, and a liberal foreign direct investment (FDI) regime. Owing to this, and further aided by the launch of Real Estate Investment Trusts (REITs) in 2016, India has become extremely attractive to Indian, as well as foreign investors looking to take advantage of the booming industry.