The term affordable luxury refers to premium housing which is financially available to a larger segment of people than the usual buyer base consisting of HNIs. Though a number of builders have successfully carved their niche in the luxury housing domain, there is definitely a limitation that exists as it caters to a class who form less that 10% of the market.
However, builders are making an effort to reach out to a wider client base. Since, mid-income buyers form the highest demand in the India’s real estate market, builders are keen to strike a balance between luxurious and affordable housing.
Expanding rapidly, affordable luxury is a considered to be a boon as it marks a revolution by making premium housing available to large number of buyers without emptying out their bank accounts. Owing to India’s diversity, there are people from various economic backgrounds who draw fairly high-salaries but do not necessarily form the elite rich class.
The large scale urbanisation, rise of the educated and salaried consumer, in short – the millennial has led to the demand for affordable luxury housing. The demand is taking place in metros across the country from Mumbai, Bangalore, Delhi, Ahemadabad, Baroda, Chennai, Gurgaon, Pune, Hyderabad and Aurangabad. Affordable luxury housing allows this middle income group to fulfill their aspirations of comfortable housing.
But what makes affordable luxury living different from luxury homes? Luxury houses are spacious and have number of additional benefits including high-end security, reserved parking, club houses and other amenities. Furthermore, these projects are located in well connected areas and wealthy localities. In order to build luxury projects at lower cost, builders need to compromise on certain aspects. Most often they purchase land at lower prices in not-very expensive neighbourhoods.
The millennial customer is not concerned with branded fittings and furniture unlike the luxury buyer, hence, here too the builder is able to cut costs but without compromising on. Millennial seek a luxurious lifestyle but with minimal waste and maximum efficiency. Young couples, corporate seniors, small business owners and nuclear families are said to form the customer base for the affordable luxury segment.
Though affordable luxury housing is at a lower cost, it is not necessarily in inconvenient locations. These projects are now coming up in the heart of the city and affluent neighbourhood, which are easily accessible. Sumer Group’s affordable housing will be seen in areas like Mazgaon priced at Rs. 2 crore onwards, while the luxurious apartments are priced at Rs. 7.5 crore onwards. Targeting Goa as well, Sumer Group’s affordable luxury projects are situated in North Goa’s Porvorim, while Bambolim, Guirium, Ucacassim and Anjuna have plots penthouses that can be termed as luxury.
With the introduction of the affordable luxury segment, builders have discovered a way to overcome the lull in the real estate sector witnessed in the last two years which resulted in wide-scale inventory pileup and slowdown in demand, by widening their customer base. Through this new segment in the industry, they are making possible for middle-income buyers to provide comfortable homes for their families, where luxury is a living experience.
The author is Rahul Shah, CEO, Sumer Group.