Far from the End for Luxury Property in India

Property in India has had its up’s and down’s for the past two years. Real estate in India has recently been in the news mostly for the wrong reasons. Specifically, luxury property in India has received a great deal of bad press of late. To better understand what is going on it is necessary to know the following facts and what their ramifications are for real estate in India.

Rise of the Ultra Rich

India’s GDP is expected to be 7.1 percent in this coming year. The number of Ultra HNI’s in India has jumped from 1.83 lakhs in 2014 to 2 lakhs in 2015. Currently, the number of Ultra HNI’s in India stands at 2.36 lakhs and this number is expected to grow to 4.83 lakhs by the middle of the next decade.  

Rising GDP in India

The per capita GDP of Indians has risen to 2,000 dollars per annum and within 3 short years, it is expected to grow to 3,500 dollars per annum. A rising income will translate into demand for more high-end property in India. Post demonetization the price of luxury property in India has corrected and prices are not expected to drop any further. Furthermore, wealthy investors and NRI’s realise that this is a good time to invest in realestate in India. Real estate sites in India make it easier than ever before for NRI’s to buy a home in India and also to steady earn rental income from their property in India.

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Size of Indian Real Estate

The size of the Indian real estate market is expected to grow from 93 billion dollars in 2014 to 180 billion dollars in 2020, and, rising from 5 percent in 2014, real estate in India will account for 13 percent of the country’s GDP by the end of this decade. Luxury properties in India make up close to 4 to 5 percent of the real estate sold in India and this number has been gradually increasing and will make up a larger share of India’s property market.

Putting it Together

The numbers of luxury real estate in India are expected to continue to grow at a fast pace. While there was a drop in demand post demonetization for mid-segment houses, the demand for luxury houses did not fall as precipitously. In the future demand for housing will be driven by the more than one segment of the populace; for instance, demand for affordable housing, the supply of which is being given special attention by the government, will be driven by lower segment households. The demand for luxury property India will also increase since NRI’s now have greater faith in the India growth story and the number of rich is growing every day in India. The growth of property sites in India that serve NRI’s is a testament to the rising demand for luxury property in India from NRI’s. Middle-income real estate in India has and will continue to be in great demand.  

Demand for luxury real estate in India has not dropped as the numbers of those who want to, and can own luxury property in India are here to stay and to prosper in their numbers.  

Super Luxury Homes Not Sold on Best Real Estate Websites in India

When buyers want to buy the best real estate in India they do not necessarily turn to the best real estate websites in India to do so. Although many premium properties are listed on web portals, some even with an asking price of forty or fifty crore rupees, yet just as one may best find a life partner through a common friend or acquaintance, one may also find the best house through someone already known to us.  

The Ground Reality

It would be difficult to find a buyer for a property one wants to sell for several tens of crore’s in the secondary market by using only a commercial real estate website or portal. Many such properties online remain listed for months or even longer; a quicker way may be to ask someone in one’s friend circle that there is a need to offload a certain property. Additionally selling a house which is valued at forty crore’s or above is in itself a full time job, knowing the person one is selling to personally or through a friend can relieve much of the burden one faces when one decides to sell such a property.

If a property needs to be sold secretly, advertising on a real estate website may also prove to be doubly damaging.

The Post Demonetization world

Selling big ticket properties in India post demonetization may actually be easier than it had been pre demonetization as the chances for fraud have been somewhat diminished. The cash component demand by many buyers has diminished and many even sell big ticket homes today mentioning to the buyer that he or she may feel free to pay any remainder due to the seller in a few months to one year. As there is still a dearth of cash more than three months after demonetization, wealthy owners of real estate are willing to dispose of a property stipulating that they can be reimbursed the balance cash component once the buyer has more free cash in hand.

The Owners of Luxury Properties

Most of those who own super luxury properties or houses in India tend to own more than one such property. There is a certain luxury such households enjoy in that they are usually not in a dire need to dispose of their home and can therefore bid their time before accepting an offer.  Creating a property site in India that can promise anonymity between buyers and sellers may be needed to allow for the sale of exceptionally large ticket size houses.