Corona Pandemic gives rise to convergence of ‘Luxury Realty’ & ‘Quality of Life’: Akash Kohli–Elante Grp
--By AkashKohli, Founder & CEO – Elante Group
Covid-19 has given rise to a convergence between “luxury real estate” and “quality of life,” where the two are now seen as being synonymous. People now want houses with more facilities.
The Corona pandemic has forced individuals to make rational decisions about what is important: health, safety, and wealth and income security. The spaces in which we live, and more importantly, what we expect of them, stand to remain forever altered. The importance of a "home," a 'safe' haven, an ideal workplace, or gym, has been recognised by people around the world. Work from home ("WFH") has increased the market for larger homes that integrate workspaces as a possible new constant. People also want additional facilities to allow them completely self-sufficient units, such as gyms, yoga rooms, and home theatres.
With an emphasis on purchase, smart millennials who previously favoured renting properties over purchasing have now changed their view. As demand for low-end and ultra-luxury homes has strengthened in the last six months, spurred by the evolving needs of a pandemic, we expect 40 percent revenue growth during this fiscal year. Here's a sneak preview of the observed trends that are structuring luxury housing development.
Eyes on the ideal location.
We have seen a substantial rise in buyers seeking property in elite neighbourhoods, including in tier 1/metropolitan cities such as Delhi NCR, Mumbai, and Kolkata, and picturesque hill and beach destinations across India have attracted growing interest from both domestic and NRI buyers. Gated and small apartments are also in great demand as they fulfil all luxury requirements, but compared to fully fledged luxury ventures, they cost slightly less, introducing a new niche in luxury real estate.
Buyers are searching for space outside cities, and in Goa, Maharashtra, Kerala, and Uttarakhand, late HNI and UHNI buyers are increasingly looking for picturesque and self-sufficient properties in hill stations and holiday destinations. Holistic living has a new definition and has paved the way for a comfortable second home to invest in.
With the latest WFA standard or able to operate from anywhere, second home destinations such as Goa, Dehradun, and Alibag have become all-year destinations and sometimes even primary homes. With their exceptional offerings of external-inside architecture style villas, simple connectivity, favourable weather conditions, and better AQI (air quality index) among others, these locations are hot favourites for the luxury consumer.
Reduced interest rates and stamp duty
With major financial institutions providing competitive home loan options in the range of 6.75 percent to 7.5 percent, interest rates for home loans are at a historic low. Home loans at prevailing interest rates allow substantial savings to be made while creating an asset for end-use or investment purposes. In fact, a lower interest rate provides borrowers with an opportunity to increase the amount of the loan, helping to expand their choice of a more luxurious home, including better amenities and lifestyle facilities in premium neighbourhoods.
What NRI can expect from healing real estate
A study on the global economy was published earlier this year by the International Monetary Fund (IMF) and the United Nations (UN). The study projected that the Chinese and Indian economies could be expected to recover by 2021, amid a deteriorating global economic climate and restrictions on foreign exchange. This scenario has piqued the attention of NRI (non-resident Indian) investors with a strong financial foothold, coupled with increasing incentives such as the value depreciation of the Indian rupee (by almost 10 percent) against the American dollar.
The depreciation of value places the U.S. dollar at its highest mark ever at the rupee exchange rate, combined with improved FPI flows that carry the rupee stability. For NRIs in India, this suggests improved buying power as it makes the U.S. dollar stronger.
In addition, the introduction of various reforms and RERA in India has led to boosting the confidence of NRI investors looking to reap incentives from premium value real estate opportunities. RERA provides more clarity, registered properties, a simplified way of communicating, and trustworthy developers who, considering Covid-19, have only made the prospect of buying properties in India more attractive to NRIs. Many in the real estate industry expect investments from non-resident Indians to hit a significantly high $13.1 billion figure by FY21.
(Elante Group was established in 2009 and develops ultra-luxury independent residencies in Gurgaon and Delhi.)