In the aftermath of the pandemic, the desire for larger, more thoughtful spaces has skyrocketed. The pandemic has caused people to re-evaluate their living spaces, and there is now a clear preference for homes with more room, comfort and quality amenities. This trend is particularly evident among the wealthy, who increasingly seek properties that reflect their lifestyle and provide a sense of security. Larger homes with more amenities, such as private gyms, home offices, and spacious outdoor spaces, are becoming more popular.
India’s rapid economic growth and extensive infrastructure development are further increasing the demand for luxury real estate. Cities like Mumbai, Delhi-NCR, Hyderabad and Pune are becoming centers of real estate growth, especially in the luxury segment. As the country’s economy expands, new wealth is emerging, especially among start-up founders and business leaders who rely on equity to make money. Many of these individuals are looking to invest their wealth in real estate, making luxury homes an attractive option. Additionally, rising land prices and the scarcity of prime real estate have created a sense of urgency among buyers to secure prime properties before prices rise further.
One of the key factors behind this surge in demand is the growing influence of Millennials. Millennials make up approximately 36% of the population and play a key role in shaping the luxury housing market. This generation is economically empowered due to better career opportunities and entrepreneurship. Millennials are well-traveled, aware of global trends, and understand the value of real estate investing. According to a report by Knight Frank India, most property buyers in April 2024 were millennials or individuals aged 28-43, accounting for 37% of the total share. This was followed by Gen X individuals, ages 44-59, who accounted for 36% of buyers. Unlike older generations, Millennials aren’t just looking for a place to live. They want a home that reflects their personality and meets their lifestyle needs. They are willing to invest in real estate that offers modern amenities, convenience, and a higher quality of life.
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The luxury goods market is not only attracting interest from domestic buyers. Non-resident Indians (NRIs) are also increasingly investing in Indian real estate. For NRIs, luxury real estate in India is not only a safe investment but also a way to diversify their portfolio. In times of global uncertainty, these investments can help protect your assets from currency fluctuations and other financial risks. As metropolitan centers continue to grow, NRIs see luxury real estate as a stable long-term investment that also offers personal value as a vacation home or future residence.
Urbanization is another factor driving demand for luxury real estate. As more people move to cities in search of better job possibilities, the need for housing in prime urban locations has increased significantly. This trend is especially evident in cities like Mumbai and Delhi, which are emerging as major players in the global real estate market. These cities currently rank among the highest in the world for annual price growth for luxury residential real estate, according to a Knight Frank report. For example, property prices in Mumbai have increased by an astonishing 13%, making it the second fastest growing market in the world. As the real estate landscape further evolves, advances in technology are reshaping the way developers approach projects. The focus is shifting from traditional location-based criteria to aspects such as connectivity, accessibility, and the ability to attract top talent. Smart cities and buildings are at the heart of this transformation, offering cutting-edge capabilities to meet modern business and residential needs. The government’s initiative to drive the development of 12 industrial smart cities across India is expected to further stimulate real estate demand, with both residential and commercial space expected to grow by 15-20% in the coming years. Masu. In conclusion, the increasing demand for luxury real estate, real estate development and industrial smart city development in India is transforming the market. The real estate sector is poised for continued expansion as economic growth, urbanization, and technological advances all play important roles. For developers and investors alike, staying informed about these trends and adapting to the evolving needs of buyers is essential to capitalizing on this wave of opportunity.
The author is Chairman and Managing Director of Arkade Developers.
