Rising Demand for Luxury Housing in MMR and Pune

Luxury housing is a segment of real estate that caters to the affluent buyers who seek comfort, convenience, and exclusivity in their homes. Luxury housing typically offers spacious layouts, premium amenities, scenic views, and prime locations. In India, the demand for luxury housing has been on the rise, especially in the metropolitan regions of Mumbai (MMR) and Pune.

What are the factors driving the demand for luxury housing in MMR and Pune?

There are several factors that have contributed to the increasing popularity of luxury housing in MMR and Pune, such as:

The impact of the pandemic: The COVID-19 pandemic has changed the way people live and work, creating a need for more space, privacy, and safety. Many homebuyers have realized the importance of having a comfortable and well-equipped home that can serve as a personal sanctuary and a functional workspace. As a result, the demand for luxury homes with features like home offices, balconies, gardens, and wellness facilities has surged.

The tax benefits: The Union Budget of 2023 introduced a new provision that set a limit of Rs 10 crore for tax deductions on long-term capital gains from the sale of residential property. This means that any appreciation in property prices above Rs 10 crore will be taxed at 20 percent after indexation, unless the gains are reinvested within two years. This provision, which will be effective from April 1, 2024, has prompted many high-net-worth individuals (HNIs) to invest in luxury properties before the deadline, in order to save taxes and secure their wealth.

The attractive prices and offers: The luxury housing market in MMR and Pune has witnessed a correction in prices due to the slowdown in the real estate sector in the past few years. The average price of luxury homes in MMR dropped by 11 percent in 2023, while in Pune it declined by 6 percent¹. Moreover, many developers have offered attractive discounts, flexible payment plans, and freebies to lure buyers and clear their inventory. These factors have made luxury housing more affordable and accessible for many potential buyers.

The aspirational value: Luxury housing is not just a matter of necessity, but also a matter of aspiration and lifestyle. Many buyers aspire to own a luxury home that reflects their status, taste, and personality. Luxury housing also offers a sense of exclusivity and prestige, as well as access to a like-minded community and social network. Furthermore, luxury housing is seen as a symbol of success and achievement, which motivates many buyers to invest in their dream homes.

How is the luxury housing market performing in MMR and Pune?

According to a report by ANAROCK Property Consultants, the luxury housing segment (defined as homes priced above Rs 1.5 crore) accounted for 21 percent of the total sales in MMR and 18 percent of the total sales in Pune in Q3 2023². This indicates a significant growth in the demand for luxury housing in these regions, compared to the previous quarters.

Some of the key trends and highlights of the luxury housing market in MMR and Pune are:

The preferred locations: In MMR, the most sought-after locations for luxury housing are South Mumbai, Bandra, Juhu, Worli, Lower Parel, Powai, and Thane. These areas offer excellent connectivity, social infrastructure, and lifestyle amenities, as well as scenic views of the sea or the hills. In Pune, the most popular locations for luxury housing are Koregaon Park, Kalyani Nagar, Boat Club Road, Baner, Balewadi, Hinjewadi, and Kharadi. These areas are close to the IT hubs, educational institutions, and entertainment zones, as well as offer a serene and green environment.

The preferred configurations and sizes: In MMR, the most preferred configuration for luxury homes is 3 BHK, followed by 4 BHK and 2 BHK. The average size of luxury homes in MMR is 1,800 sq ft³. In Pune, the most preferred configuration for luxury homes is 4 BHK, followed by 3 BHK and 5 BHK. The average size of luxury homes in Pune is 2,500 sqft⁴.

The preferred amenities and features: Some of the common amenities and features that luxury homebuyers look for in MMR and Pune are:

  - Smart home technology and automation systems

  - Modular kitchens and branded fittings

  - Private elevators and parking spaces

  - Rooftop gardens and terraces

  - Swimming pools and jacuzzis

  - Gymnasiums and spas

  - Clubhouses and banquet halls

  - Concierge and security services

 What is the outlook for the luxury housing market in MMR and Pune?

The luxury housing market in MMR and Pune is expected to witness a sustained demand in the coming years, as the economy recovers from the pandemic and the consumer confidence improves. The availability of affordable finance, the rationalization of stamp duty and GST, the implementation of RERA, and the increase in supply of quality projects will also support the growth of the luxury housing market in these regions. Moreover, the aspirational value and the investment potential of luxury housing will continue to attract buyers who seek a premium lifestyle and a long-term asset appreciation.