Are luxury projects staging a comeback?

Luxury projects are slowly making a return, even as affordable and mid-segment housing have been dominating the property market for a while now. Developers, particularly from southern India, are strategically launching projects in the premium category with select designs and sizes to capitalise on this opportunity.

Bengaluru-based Prestige Group is set to develop a luxury residential project in Pali Hill, Bandra, said a person familiar with the plans.

It’s a small but high-value redevelopment project, the person said, requesting anonymity.A Prestige spokesperson declined to comment.

Last week, Adarsh Group launched its luxury villa project, Adarsh Sanctuary, in Bengaluru. The 172 villas across 21 acres are priced at around Rs 2.4-3.5 crore. “The ticket size is important and it’s critical to price the product correctly. Villas or homes costing Rs 6-8 crore may be tough to sell today,” said BM Jayeshankar, chairman and managing director, Adarsh Group.

Bengaluru’s Puravankara Ltd recently started its WorldHome Collection of luxury apartments. The first three projects would be launched in Bengaluru, followed by Chembur, suburban Mumbai and Chennai’s Guindy.

Managing director Ashish Puravankara said, “Today, pricing is not as critical as the ticket size of apartments. We need to build more functional homes and maintain smart sizes.”

Bengaluru-based Sobha Ltd, known for its upscale residences, plans to enter Delhi and Hyderabad in the coming quarters with a premium project in each of these markets.

Sales in the Rs 1-2 crore segment saw 8% growth in the September quarter, according to a report by Liases Foras Real Estate Rating and Research Pvt. Ltd. Mumbai Metropolitan Region had the maximum sales share of 32% in this segment.

“The things that matter to the customer are quality, amenities and modern specifications, and the price and space that’s offered,” said Gaurav Sawhney, president-sales and marketing at Piramal Realty. The Mumbaibased firm had sales of Rs 3,000 crore from its Mahalaxmi and Byculla projects in the last two years.

Liases Foras CEO Pankaj Kapoor said, however, that luxury projects “are being launched at a discount today. With rational size and price, sales may happen. Otherwise, the segment is still under distress.”