Surge in luxury housing sales: A look at factors fueling high-end property demand in India

Luxury real estate in India has become a magnet for high-net-worth individuals and investors in 2023. According to data provided by CBRE South Asia, there has been a remarkable surge in the sales of high-end luxury housing during the first half of the year 2023. 

In this period, sales in this category have increased by a staggering 130 per cent. Some specific cities have witnessed particularly striking growth, with Hyderabad experiencing a remarkable 14-fold increase in sales, and the Delhi-National Capital Region (NCR) observing a three-fold rise. It's important to note that this data pertains to the top seven cities and regions in India, which are Mumbai, Delhi-NCR, Pune, Bengaluru, Kolkata, Hyderabad, and Chennai.

In terms of the total sales volume, luxury housing units totalling 6,900 were sold during the period spanning from January to June. The lion's share of this impressive figure, approximately 90 per cent, can be attributed to sales in Delhi-NCR, Mumbai, and Hyderabad. Notably, both the quarters of March and June have experienced robust sales activity, with a notable acceleration in sales momentum during the second quarter of the year.

Factors Fueling High-End Property Demand

Economic Growth 

India's robust economic growth, political stability, and evolving urban landscape make it a prime destination for upscale property investments. Gunjan Goel, Director, of Goel Ganga Developments emphasized that the fast developing Indian economy, increased urbanisation, and a growing affluent population have all led to an increase in demand for luxury houses. 

Foreign Investors 

Foreign investors are keen to capitalise on the country's economic growth. "India's economy continues to be one of the globe's fastest expanding, drawing both domestic and foreign investment. This economic expansion has resulted in an increase in high-net-worth people (HNIs) and ultra-high-net-worth individuals (UHNIs), resulting in a thriving market for luxury houses. Also, The Indian government has loosened foreign direct investment (FDI) requirements in the real estate sector, making it simpler for foreign investors to make investments," said Gunjan Goel.

Rise in Disposable Income 

As disposable incomes rise, more people want high-quality living quarters, fueling demand for luxury mansions, penthouses, and flats. Jetaish Gupta, Co-Founder and director, Adore Group added, "The Indian luxury real estate market has shown to be resilient and stable, with the potential for capital gain over time. Investors can generate rental income while also benefiting from long-term appreciation. As more people migrate from rural to metropolitan areas, India is seeing a big wave of urbanisation. As a result, there is an increasing demand for expensive homes in large cities and metropolitan centres, making luxury real estate a profitable investment."

India's strong economic expansion and rapidly growing urban landscape make it an appealing target for high-end investors looking for opulence and profitable yields. With India's relentless progression, its high-end property market is projected to thrive, drawing in a larger global investment pool.