Rising disposable income to push premium housing, commercial segments

By: Sanchit Bhutani, MD, Grandthum

The premium and luxury housing market continues to rise. Aided by the pandemic-induced need for larger homes, the segment’s popularity was boosted by increasing GDP and growing disposable income. To fulfill this demand, the real estate sector witnessed the launch of premium and luxury residential projects, which saw enthusiastic buyers’ responses. 

On the other hand, starting slow, the commercial segment too picked pace. But unlike the residential sphere, where the sizes grew, the commercial segment had to reinvent itself. From malls, spread horizontally, it either developed vertically or took the form of mixed-use developments that optimally utilized spaces. Mixed-use and high streets that combined retail with office spaces emerged as the new buzzwords.

Soon as the economic recovery and back-to-office gained prominence, the residential and commercial realty boomed.

Sensing opportunity, the NRIs looking to get a property in their home country also invested in substantial numbers in India’s top cities, including the NCR. The commercial segment, too, benefitted from the NRI patronage. The favorable rupee-dollar ratio, including the introduction of fractional ownership in real estate, also piqued the interest of NRIs looking for safe investment opportunities in India. 

But the event that created the maximum impact on this development was, surprisingly, the COVID-19 pandemic. The pandemic-induced work-from-home culture has led to a fundamental shift in how people approach their living spaces. Homebuyers were no longer just looking for a place to live; they were now seeking homes that offered ample space for work, recreation, and relaxation. As a result, the demand for premium and luxury housing surged, with developers now focusing on creating homes that cater to the needs and desires of modern buyers.

As a result, it not only brought about a paradigm shift in how people perceive their homes, but as it forced individuals to spend more time at home, it led to a new emphasis on the importance of having a comfortable and well-designed living space. This has led to increased demand for premium and luxury housing, with homebuyers looking for spacious properties that offer a range of facilities, including clubs, swimming pools, gyms, landscaped gardens, open spaces, and shopping complexes for most of the day-to-day purchases.

The Indian real estate market is poised for long-term growth, driven by a combination of factors, including rising GDP and disposable income, accelerating urbanization, and a growing focus on India as a significant economic power. However, the sector must address the challenges, especially the rising home loans and the increase in input prices, to ensure that it continues to thrive and contribute to India’s economic growth.