Indian realty adjusts to new realities
Luxury realty is an obsessive reality for the moneyed. And spending money is the only currency that fortifies their social standing — both on the Forbes list and off it.
Real estate buying and selling makes for fiscal heaven in the propitious months of the Indian calendar, but this time around, there are no buyers. The Indian realty index is stable, but it doesn’t compare to what it was before demonetisation in 2016.
Yet, it remains a lucrative market for investors, and expats in particular, even after the sharp depreciation of the rupee. Time is the key component at play here. Buying property today equals buying time too as a vital appendage.
A luxury apartment in Mumbai valued at Rs70 million (approximately Dh3.5 million) will sell, eventually, but time will be a decisive factor in deciding when it does so. Slashed to Rs55 million at a sizeable paper loss to the owner, it’ll sell within six months to a year. Cutting losses on luxury property investments was unthinkable, the crash of 2008 notwithstanding.
It’s the buyers who are deciding the when and the where. Realty purchases are entirely need-based and not investment-based, barring corporates who have the money and available loans to enable their investments. Individual investors shirk buying as that entails endless tax probes and exhausting paperwork.
High on collaboration
Realty projects are akin to a big Bollywood production that’s high on collaboration. It makes for sound business strategy and seems to have found favour with Mumbai’s developers too. Developers are compelled to co-build as it is no longer feasible to sit on overpriced plots and build on one’s own financial steam.
There are few independent developers in the luxury segment today. Co-building is a profitable proposition for developers, but adds up to a larger liability for buyers to commit to new constructions.
India’s leaning more towards luxury rentals than luxury buys. The return on investments in purchased property through leasing is abysmal, and not even marginally close to the purchase costs. Reselling isn’t easy either.
Future-forward individuals are now choosing to rent luxury homes with all the trappings versus buying. Fiscally, it’s more conducive to live the luxe life without a homeowner’s liabilities.
The freedom to shift in and out of cities, upsize and upgrade to glamorous homes and neighbourhoods when the mood strikes far outweighs setting up immovable roots in one place — and all of it with clean bank transfers that comply with realty regulations.
The new luxe word
Green is the new luxe word and agricultural neighbourhoods are the trend du jour. This involves integrating agriculture into residential neighbourhoods with working farms and green space.
“Agri-hoods” suit the natural Indian landscape and will appeal to the environment-conscious and rich millennials who are always seeking the “next level” in their lives.
Living concepts of clean eating, organic produce, solar energy, climate change, rainwater harvesting and the great outdoors with fresh air are selling successfully worldwide. Under-construction properties advertise with a definitive emphasis on the green and of integrating organic food produce. Full-scale agri-hoods are the future of luxury realty.
Also, tactile art is taking over luxury realty. Established and emerging artists alike are designing not just pieces of art, but entire residences, harmonising their artistic voices with the distinct individualism of homeowners.
Fashion couturiers Rohit Bal and Tarun Tahiliani are engaged in residential design, adding their genius to concrete. Fashion and art create a historical archive of the times we live in. Architecture is almost incongruent to individualism, what with high-rises taking over Indian metros, cities and towns.
But the highest honour in the architectural world — the Pritzker Architecture Prize Laureate — went to an Indian for the first time this year. Professor Balkrishna Doshi won the honour at age 90 for his deeply personal and poetic architecture that touches lives of every socioeconomic class across a broad spectrum of genres.
If only the Indian realty business could turn a page as poetic as his works in its design ethos.
■ Rubina A. Khan is a Mumbai-based writer.