High-Value Property Transactions Double Since 2019

High-Value Property Transactions Double Since 2019

High-value property transactions, with apartments priced at Rs 1 crore and above, now contribute 37% of the total property sales in India, up from 16% in 2019, according to a report by PropTiger.com, owned by REA India.

Rising Trend in Premium Real Estate

There has been a consistent increase in the sale of properties in higher price brackets, including those valued between Rs 75 lakh-1 crore and above Rs 1 crore. This trend suggests a growing inclination towards upscale real estate offerings, potentially driven by factors such as increased disposable income and changing lifestyle preferences.

Decline in Affordable Housing Demand

Conversely, there has been a decline in the market share of properties in lower price brackets, indicating subdued demand for more affordable housing options. This decline may be influenced by various economic factors, including inflationary pressures and shifting consumer priorities.

“The escalating demand for premium properties in Q1 2024 underscores the resilience of India's real estate market. With the rising costs of land, inputs, and construction, the once-luxurious threshold of Rs 1 crore in major cities is becoming increasingly common,” said Vikas Wadhawan, Group CFO of PropTiger.com.

Shift Towards High-End Properties

According to the report, Q1 2024 marked a discernible shift towards high-end properties among homebuyers. During this period, substantial growth (50-55%) in demand was observed within the Rs 1-5 crore price bracket, closely followed by the Rs 5-10 crore range. This trend was particularly evident in cities like Mumbai, Gurugram, and Bengaluru. This transition signifies a departure from purely budget-driven decisions towards properties that better resonate with buyers' lifestyle preferences.

Surge in Gross Transaction Value

The Gross Transaction Value (GTV) experienced a notable surge, escalating by 91% to reach Rs 1.11 lakh crore in Q1 2024 when compared to the same period in 2019. Projections indicate that this trend is poised to persist, fueled by sustained demand and the ever-evolving lifestyle preferences of buyers.

Factors Driving the Market Shift

The rising demand for high-value properties can be attributed to several factors. Firstly, the increase in disposable income among India's affluent population has played a significant role. With more financial resources at their disposal, buyers are seeking properties that offer luxury, comfort, and modern amenities.

Secondly, the changing lifestyle preferences of buyers are also contributing to this trend. The demand for spacious homes with premium features has grown, driven by the desire for a higher quality of living. Properties in prime locations with excellent connectivity, top-notch facilities, and security features are particularly sought after.

Furthermore, the real estate market has witnessed a shift in consumer priorities. There is a growing preference for investing in real estate as a means of wealth preservation and growth. High-value properties are seen as lucrative investments that offer substantial returns over time, attracting both domestic and international buyers.

Impact of Urbanization and Infrastructure Development

The rapid urbanization and infrastructure development in major cities have also played a crucial role in boosting the demand for high-value properties. Cities like Mumbai, Gurugram, and Bengaluru have seen significant improvements in their infrastructure, including the development of new roads, metro lines, and commercial hubs. These developments have enhanced the overall appeal of these cities, making them attractive destinations for high-value property investments.

Moreover, government initiatives aimed at promoting the real estate sector, such as favorable policies and incentives, have further fueled the growth of high-value property transactions. The implementation of the Real Estate Regulatory Authority (RERA) has increased transparency and accountability in the sector, instilling confidence among buyers and investors.

Future Outlook for High-Value Properties

Looking ahead, the trend of increasing high-value property transactions is expected to continue. The sustained demand for luxury homes, coupled with ongoing urbanization and infrastructure development, will likely drive the market further. Additionally, the evolving preferences of buyers, influenced by factors such as remote working trends and the desire for larger living spaces, will continue to shape the demand for high-end real estate.

As the real estate market evolves, developers are also adapting to meet the changing demands of buyers. There is a growing emphasis on creating innovative and sustainable living spaces that cater to the needs of modern homebuyers. Developers are incorporating advanced technologies, eco-friendly features, and smart home solutions to attract discerning buyers in the high-value property segment.

In conclusion, the doubling of high-value property transactions since 2019 highlights the dynamic nature of India's real estate market. The shift towards upscale properties reflects the changing aspirations and preferences of buyers, driven by increased disposable income, lifestyle changes, and evolving market dynamics. As this trend continues to unfold, the real estate sector is poised for further growth and transformation.