While Indian cities grow in all directions and new neighborhoods feature uber cool premium projects, the old money, and even the discerning new money, opts to stay in neighborhoods that were always considered luxurious and wealthy.

Le Mirage, Pune

In India, the definition of luxury housing varies from city to city, and the demand for luxury homes in each city also differs. A plush 2 bedroom flat in a central location or in an area near to corporate or IT employment hubs would qualify as a luxury home in Mumbai, Pune or Bangalore solely on the basis of its location. However, the classic Indian concept of a luxury home also involves generous size – so a 3 or 4 bedroom apartment is definitely defined as luxury. As a rule, such luxury flats are built only by developers who have specific expertise in this genre, as apart from large size, customers look for highly evolved amenities and facilities to create the necessary luxury ethos.

So, what drives the luxury real estate market in India?

It is a mistake to club the demand for ultra-luxury housing with that of the rest of the property market, because the dynamics are very different. In the first place, the luxury homes market tends to be quite end-user centric in many cities. The higher ticket sizes mean that only investors with considerable capital at their disposal are active in the luxury segment. The end-users, who largely patronise the luxury housing segment, generally do not need housing loans; they purchase such properties from their own capital.

Marine Drive, Mumbai

Cities like Mumbai, Pune, Bangalore, Chennai and Delhi have their well-established high-value luxury homes in prime locations. Their families have owned the luxury property they reside in, for several generations, and are not open to relocating. The neighbourhoods they live in tend to have a rich share of natural ambience due to strict development norms, but a high degree of social infrastructure which ensures that life is trouble-free.

Among this location-driven buyer set, the demand for genuine luxury homes is considerable. Due to very limited supply in these areas, such properties often tend to change hands among this specific buyer segment. Prices for such ultra-luxury homes are a function of both the high-value vanity addresses and the size and configuration. Rarely is a large family-owned property sold and redeveloped into limited-edition boutique homes, and if it is, these homes are immediately snapped up. We can see this dynamic actively at play in areas like Cuffe Parade, Nepean Sea Road, Worli, Juhu and Lower Parel in Mumbai. In Pune, the specific areas for such luxury housing are Sahakar Nagar, Boat Club Road, Kalyani Nagar and Koregaon Park.

Marvel Projects, Pune

Since they are meant to function as family estates, luxury homes in such areas doubtlessly need to get the size factor right. Such extra-large ultra luxury living spaces are expected to offer ultra-modern luxurious amenities that can be upgraded as technological advancements push the luxury envelope further up the value chain. These addresses may or may not be centrally located, but that factor does not, in any case, play a big role.

Why do core luxury addresses never change?

Spatial expansion of cities like Pune, Bangalore, Chennai and Delhi is constantly pushing the city boundaries further and in different directions. Simultaneously, new workplace hubs geared to the booming Information Technology sector have sprung up in the emerging locations that Infotech companies prefer to be, due to lower property costs.
These new residential areas usually see high demand for homes of all ticket sizes, including the more expensive ‘green homes.’ While these higher-end homes definitely fall in the category of premium housing, the locations themselves do not spell luxury. The same dynamic can be seen around large manufacturing hubs, where premium housing can be found in locations that have essentially have an industrial, blue-collar image. Through all this expansion, a city’s core luxury address locations remain static and continue to hold sway, even as the city itself grows in all directions.

Maker Tower, Cuffe Parade, Mumbai

These addresses have very little to do with Indian real estate’s primary growth driver, which is employment generation. They are the home of the city’s landed gentry – its long-established core of wealth. Though property owners in luxury locations are often owners of very large businesses, they themselves are not dependent on quick access to workplace hubs. They have earned a far more leisurely life long ago, and their main objective and prerogative is to dwell among their peers in an environment untouched by the mass development in every other part of the city.

Luxury housing is immune To general market dynamics

The demand for luxury housing in these elite locations is therefore always steady. Developers’ who have the rare opportunity to create new luxury housing projects in luxury locations, will invariably have a dedicated inner circle of HNI buyers and investors who will snap up their limited-edition offerings. Housing in luxury locations is more or less impervious to the influence of recession, as the buyers are not dependent on home loans.
When the opportunity to acquire properties in a new luxury project in a luxury neighbourhood presents itself, such buyers will enter the project at the pre-launch or under construction stage to avail of the best rates.

The marketing strategy for homes in a city’s core luxury areas also differs significantly from the kind of campaigns developers use to promote mid-income housing projects. The marketing approach focuses more on the aspiration for exclusiveness and status among people who can afford to avail of it. While word-of-mouth communication among core investors usually suffices to draw massive inquiries, developers will also advertise these offerings in prestigious lifestyle magazines, airport lounges and similar platforms.