Decoding the socioeconomic impact of surging luxury real estate demand in India
The Indian real estate segment has undergone a transformative shift. The most notable shift that has come to the fore in the last couple of years is the demand in the luxury housing segment. Not only are the discerning homebuyers looking for a home that matches their lifestyle, but there is also been a greater demand for bigger homes.
This has also been captured in a recent report by Anarock Research, which reveals that the average flat size in top Indian cities has been on the rise, experiencing an annual increase of 11% in 2023. According to the data captured in this report, Delhi-NCR, Chennai, Bengaluru and Hyderabad witnessed an increase in average flat size but Delhi-NCR led the surge with a remarkable 37% increase, attributed to the influx of new luxury supply.
The surge in luxury real estate demand is fueled by multiple factors, including rapid urbanization, job migrations, and the aspirational lifestyle embraced by contemporary buyers. Millennials and Gen Z, with their higher disposable incomes and penchant for opulence, are playing a significant role in reshaping housing preferences. There is also a gradual shift towards holiday homes that are located away from city life and provide solace from busy lives.
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The changes in the geopolitical landscape and the weakening of the dollar have prompted High-Net-Worth Individuals (HNIs) and Ultra-High-Net-Worth Individuals (UHNIs) to look for newer investment options. There is a growing perception among these communities that luxury real estate is a lucrative investment avenue and will yield long-term appreciation.
The burgeoning luxury housing sector is not just reshaping the real estate
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