THE PROMISE OF LUXURY
Even though the region’s real estate market was hit by a slowdown, luxury and super-luxury housing still has huge potential, says Munieshwer A Sagar
From multi-storey luxury cottages in the Himachal hills, luxury villas in the midst of a golf course in Ludhiana to luxury penthouses in the Chandigarh tricity region… luxury and super-luxury housing has come a long way in the region.
Ticket prices in this segment start from around R1 crore as developers claim they are not selling a product but a lifestyle. And it is not just the amenities, the design, size, technology incorporated that matter. The brand value of these projects is equally important. Differentiators in the product like scenic views from hilltops or 360 degree views of cities also matter in this segment. As far as supply in the region is concerned, it is mostly concentrated in the mid-price segment of R50 lakh to R 80 lakh. While options and supply in the budget and luxury segments remain limited, the budget segment has started to attract greater developer attention in recent years. Supply in the luxury segment, however, remains limited.
The slowdown impact
Slowdown in the real estate market has impacted the luxury segment. With the entry of local, national and international players in 2005, supply of luxury projects also went up during the period 200506 and later. Both the end-user and the investor responded positively to these projects. In the last three-and-a-half years, however, demand dried up, and consequently, developer priorities and supply creation in dif ferent residential segments gradually changed. In the last few years, supply creation diminished with very few new project launches. “The sales in all the segments declined in the last few years. In the luxury segment also the demand is low. Only the end-user is currently active in th e market , an d this demand is also limited to the price segment of R25 lakh to R40 lakh,” says Anil Chopra, chairman CREDAI Punjab.
Developers have been on their toes, trying to figure out ways to check the severe price correction and slowdown in demand. They have changed their offerings and added attractions to their existing products and projects. Different elements of luxury housing were added to the midpriced and premium segments to attract buyers.
Prateek Mittal of Sushma Buildtech, a Zirakpur-based real estate developer, says, “The nature of demand and land cost have affected the growth of the luxury and super-luxury segments in the Chandigarh tricity region. Also, in recent years, housing categorised as luxury has now become a part of the midpriced segment with standard offerings. For instance, well equipped club houses, gyms, community swimming pools, etc are increasingly becoming part of the mid-priced and premium segment housing products. In ter ms of size and area, though, 4BHK (bedroom-hall-kitchen) and 5BHK residential units have an edge in terms of luxury categorisation.”
Local real estate experts say that the potential of the luxury and super-luxury segment in the region has yet to be fully realised.
Himanshu Pant, business-head, Ansal API, based in Chandigarh, says the potential of the luxury segment is yet to be fully realised in the region. “Luxury and super-luxury housing is still to be fully developed in the region. Most of the residential properties and projects marketed as ‘luxury housing are not necessarily luxury housing. At best these can be termed as premium housing. In the Chandigarh tricity, a market driven by the service class, there aren’t many examples of luxury and superluxury living that compare with national and international levels of luxury housing. The potential demand for luxury housing is also limited here.
If the planned IT industry and corporate expansion actually materialises in the tricity area, then the luxury segment demand and supply will surely increase. In other areas of the region such as Ludhiana and Jalandhar, markets driven by the business class eager to spend surplus money on luxury goods and services, the potential for luxury housing is immense. Already, there are products and projects in Ludhiana that cater to such a demand.”
Areas around hill stations like Kasauli, Chail, and Shimla in Himachal Pradesh are some of the areas where luxury and super-luxury housing has taken roots, attracting buyers from across the region.
Ranjit Kapur, promoter, Chail Heights, says, “There is a strong demand for luxury and super-luxury housing in the area. The supply of luxury villas is expanding very fast and demand response is also good. Recently, a national level developer successfully sold luxury villas priced at around
R5 crore. The demand for such luxury housing in the region emanates mostly from Punjab, Chandigarh and NCR regions. Buyers of such properties buy them as lifestyle statements and spend their summer holidays there. In recent years, the NRI (non-resident Indian) buyer has also shown increased interest in luxury housing in the area.”