Track2Realty Exclusive: The question before Indian real estate today is what makes a luxury living? Is it high-end apartments? No. Luxury living is creating an ambience in totality that not just matches the aspiration level, but exceeds it.
Pankaj Bansal, Director of M3M India believes luxury is an ever evolving concept. What was luxury yesterday may be mass today. In less than 20 years, India has seen a sea change in use and demand profile for mobile phones. Today, even those in the lower socio-economic strata aspire to and possess a feature rich smart phone that was unthinkable until few short years back. Demand for products that represent luxury change with times.
Whether developers are getting into luxury segment to make at least one project as flagship and hence command premium in other projects as well.
“In some cases this may be true as it requires a different set of skills and resources to deliver and sustain the mental positioning as a luxury project developer. But this is purely a demand-supply situation. It has nothing to do with subjectivity or obsession. Demand for luxury features in real estate products arises from the ever changing needs and aspirations of the growing middle and upper income strata of Indian society. As home buyers rise up the economic ladder and get more exposed to the lifestyles of the rich in other countries, they demand similar services here in India as well. This phenomenon then becomes a “brand driver” for developers who possess the skills and resources to cater to this segment,” says Bansal.
Devang Varma, Director, Omkar Realtors & Developers makes an interesting point here when he says luxury happens to be very location specific and very precise when it comes to micro markets. For example, within Mumbai one can have a clear cut differentiation between Worli and Parel locations. On the over use and abuse of the term ‘luxury’ Varma says that is something where the industry should play a sensible and responsible role. In any case, today’s customer is highly aware and smart enough to separate the wheat from the chaff. He, however, does not agree that developers are foraying into luxury segment to create flagship projects.
“Not really. But definitely it helps showcasing a developer’s ability to create a great world class product. Definitely in real estate, it helps as you are selling a dream. Ideal concept of luxury is upgrading and making a major difference to the present day living/lifestyle of any individual. Luxury for a slum dweller is getting a proper 1 BHK while luxury at mid-level target segment would be getting an apartment in a good complex with all amenities; at a good location. Then you have luxury for high-end space which could mean extremely plush apartments at a prime location with great access and spectacular view,” says Varma.
Agrees Neeraj Bansal, Partner-Real Estate & Construction, KPMG India and adds that if Noida extension is taken for example a 3-4 BHK flat with air-conditioning & society having swimming pool & club is being projected as luxury. In contrast to micro market of golf course road in Gurgaon where a custom fitted apartment with centrally air-conditioned and proximity to golf course is projected as luxury apartment. In absence of any clear cut definition of luxury apartments, any project having additional features over nearby projects in a micro market are projected as luxury project.
“The concept of luxury housing is evolving in India, with lot of new trends being launched by developers. Over the last few years a number of projects have been conceptualized and marketed successfully within the luxury segment. The luxury residential market is the fastest growing market both in India and internationally. Some real estate developers have tied up with domestic & international fashion brands for custom design of flats. Some developers are providing features like fully serviced apartments with tie up with branded hotels that paper the customer like they are living in a hotel. Some developers are also focusing on developing townships with golf course, modern landscape such as hills, mountains etc. that generate more premium then the rest of the market,” says Bansal.
Nitesh Kumar, COO, TDI Infracorp believes that luxury projects have a Pan-India demand, it just depends from region to region what kind of luxury facilities people are looking for. Nowadays people want their home to reflect their financial status and hence in every region you will find luxury as per the need and necessity of the consumer segment.
“Developers are offering luxury housing option because people are looking out for more choice apart from basic necessities. Understanding this demand, a lot of real estate developers are exploring options like setting-up Lakeside residency fully equipped with a terrace garden, sky gym, revolving lounge and waterside pool. The rise in disposable income, increased aspirations, lifestyle changes etc are the factors behind increasing luxury living. Developers have witnessed unprecedented demand for luxury housing like apartments, penthouses, villas, row houses/bungalows, etc which have artificial lake, green loops, parks or even golf courses. If we look at the rising number of affluent people then the demand of luxury housing is going to increase in the near future,” says Kumar.
Harmit Chawla, Managing Director of HCorp Realty says over reliance on luxury to get more eyeballs in the market may be borne out of obsession or strategy. And it is this difference that ultimately defines whether the project would be actually having luxury quotient or copy and paste of many other so-called luxury projects.
“Luxury could be a matter of location, quality of product or type of product. Now we come to the point of image, and abuse of the luxury word and the fact is that the mere use of word luxury in a project lets the builder have breathing space on profits which can be veiled on cost of construction because customer will never come to know the cost of construction on the product he is buying,” says Chawla.
Luxury is extravagant rare indulgence for many but a necessity for some. Luxury for the class that is at the top of social and hence realty pyramid is about taste, comfort, feel, a overwhelming sense of ownership and rarity, pride and above all luxury for them is about customization. Very few developers in India have been able to match these expectations, though more than the aspiration of the home buyers, it seems it is the aspiration of the developers to get into luxury segment for better ROI, face value and brand premium.
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