A private plunge pool to blow off stress on a sultry summer day as the sun sets, a helipad to beat the mean streets clogged with honking drivers, a concierge service that would put Pepper Potts to shame... No, you’re not in an episode of Succession or at a seven-star hotel. This is a glimpse into the everyday life of your friendly neighbourhood billionaire, and all this is available in your city.

Ultra-luxury houses that can give The Louvre a run for its money — like this particular residential tower in Mumbai where you can enjoy an original Picasso in the lobby as you sip your morning tea — are becoming all too common in India. The price tag can run into hundreds of crores, something that’s hardly a deterrent for the rich and famous whose numbers seem to only be increasing, with India adding a billionaire every 5 days in 2023.

The extraordinary surge in wealth since the pandemic has fuelled a boom in the luxury housing market that has all but reshaped the country’s real estate landscape. With the pandemic behind us and the economy continuing to deliver world-beating growth, the luxury residential segment is emulating the growth march, setting new benchmarks for opulence, exclusivity and sophistication.

When billionaire investor and D-Mart founder Radhakishan Damani bought a bungalow in South Mumbai’s tony Malabar Hill for a cool Rs 1,001 crore, it made big headlines. While the April 2021 deal remains an extraordinary outlier, the transaction was the beginning of what has now become a defining trend rather than an anomaly. The ultra-luxury real estate market has since witnessed a wave of high-value transactions, with properties worth hundreds of crores being snapped up at an unprecedented pace. The surge reflects a seismic shift in buyer confidence and a growing preference for opulent, trophy properties among India’s ultra-wealthy.

Demand is coming from all corners. High-net-worth individuals (HNIs), millennials with substantial disposable incomes, and investors seeking safe-haven assets amid volatile financial markets — all these classes of buyers are creating a record demand for swanky high-rises in metros and sprawling villas in emerging cities alike.

SURGING APPETITE

During the 12 months through September this year, sales of luxury apartments surged 648% over 2021 (the first full pandemic-hit year) to 19,385 units. The value of all properties sold jumped 633% to Rs 1.3 lakh crore, according to data from Liases Foras, a non-broking real estate research firm.

Over 2,590 such apartments valued at Rs 17,304 crore were sold in the 12 months leading up to September 2021.

“The luxury residential segment has witnessed a remarkable transformation, with around 600% growth in both sales and new launches since 2021,” said Pankaj Kapoor, managing director, Liases Foras. “Following the pandemic, a surge in demand for upgrades emerged, driven by attractive price corrections that lured high-net-worth investors. This unprecedented growth was further propelled by robust stock market returns, which helped sustain the momentum in the luxury real estate market.”

Over the last two years, deals for apartments priced above Rs 100 crore have been closing faster than ever, underscoring the immense appetite for ultra-luxury living spaces.

The number of Indian ultra-HNIs is expected to increase to 19,908 by 2028 against 13,263 in 2023, a 50.1% growth. This would be the highest growth in the number of ultra-HNIs for any country, according to data from Knight Frank.

“The prime luxury residential assets continue to be the mainstream investment avenue for ultra-wealthy individuals in the country,” said Shishir Baijal, CMD, Knight Frank India.

“This is clearly reflected in the fact that India’s ultra HNIs — with a net worth of $30 million and above — allocate 32% of their wealth towards the residential real estate asset class. The Indian affluent class has always had a global taste, and now they are expecting homes that seamlessly blend opulence with international standards of design, technology, and sustainability.”

Robust economic growth and rising income levels in India are leading to an increase in the number of HNIs and affluent middle-class buyers. Wealth accumulation from booming sectors like technology, pharmaceuticals, and finance has empowered these HNIs to invest in luxury properties, with many viewing luxury real estate as an integral part of their asset portfolio, combining lifestyle enhancement with potential long-term capital appreciation.

“Wealth generation is on the rise across the country, fuelling a significant shift in how people view their living spaces,” said Boman Irani, CMD, Rustomjee Group.

“Homebuyers are prioritising lifestyle, comfort, and quality of living. Larger homes with premium amenities in desirable locations have become the new standard as people increasingly appreciate the value these features bring to their lives.”

According to him, the trend highlights a deeper connection between homeownership and personal aspirations, with investments driven by the desire for long-term satisfaction and a better quality of life.

THE BRAND GAME

Branded residences, which are luxury homes created in partnership with high end brands like Armani, Trump, and Four Seasons, are also becoming increasingly popular in India. These residences offer a blend of exclusivity and lifestyle, backed by international quality standards, unique designs, and world-class services, and cater to affluent buyers who seek not just a home, but a lifestyle statement.

“India is ready for branded residences as the demand for luxury continues to soar,” said Kalpesh Mehta, founder, Tribeca, Trump Tower’s India partner.

“Affluent buyers are looking for more than just a home; they seek exclusive, world-class living experiences that come with top-tier amenities, high-end service, and a prestigious address. As the market for luxury living expands, branded residences are positioned to cater to the growing class of HNIs who prioritise quality, security, and a premium lifestyle.”

According to him, these marquee and iconic developments with global standards are set to redefine the real estate landscape.

Tribeca has indicated that it has already finalised six projects across India, totalling 8 million sq ft with a revenue potential of over Rs 15,000 crore. India already has the highest number of Trump branded projects in the world, after the US.

With property values in India being more competitive compared to other international markets, NRIs have also shown a growing interest in purchasing luxury properties back home. Factors like a favourable foreign exchange rate, high property appreciation potential, and the appeal of having a base in India are also helping fuel NRI investments in the segment. Additionally, global investors see Indian luxury real estate as an emerging, high-yield market.

Luxury homes today come with a host of sophisticated amenities like private elevators, rooftop gardens, temperature-controlled pools, concierge services, and cutting edge home automation systems. Smart homes, integrated with IoT-enabled devices that allow remote control of lighting, temperature, and security, are also in high demand, catering to tech-savvy millennials.

THE CHALLENGES

Despite its growth potential, the luxury real estate market also faces certain challenges including economic uncertainties, high cost of development, and, most important, a limited pool of buyers.

Building luxury residences requires significant investment in land, high-quality materials, and premium amenities, which increases the cost of development.

Fluctuations in the cost of construction materials, labour shortages, and regulatory fees can further strain budgets, sometimes leading to delays or price escalations.

Luxury real estate is sensitive to economic shifts and can experience fluctuations in demand during economic downturns. Supply scenarios and economic instability can affect the purchasing power of potential buyers, particularly those dependent on mortgage financing.

The segment has a limited buyer base compared to mid-range housing, making it more vulnerable to market fluctuations. High price tags mean that developers need to target a niche audience, and the sales cycle for luxury properties tends to be longer, which can impact cash flow and project timelines. The wealthy, though, don’t seem to care.