APPD Market Report Article


February 28, 2022


INR 40.5


Demand for luxury homes remains steady

  • Demand for high-end residential properties was quite stable in 4Q21. The work-from-home trend has definitely given a boost to demand for larger homes. NRIs are also keen to purchase high-end homes which are spacious, open, green, fully automated and smart and enhance a sustainable lifestyle with electric vehicle chargers.
  • With prices remaining stable and low mortgage rates, for NRIs the attractive dollar-rupee value and easing of investment rules and the lucrative festive season offers all combined to keep demand for high-end homes at steady levels.

No new launches in 4Q21

  • Developers are focused on maintaining sales momentum in their existing offerings and, hence, new launches in the high-end segment were not recorded in the quarter. We do expect that a greater number of launches will come up in the next year as developers are keen to tap into the growing demand for bigger and fully-loaded homes.
  • Developers are being cautious and aligning their launch strategies according to changing market dynamics but keeping a close eye on the COVID-19 concerns as well.

Capital values and rents unchanged in all submarkets

  • Capital values remained stagnant q-o-q across all submarkets in the high-end segment. However, rising input costs are likely to put pressure on developer margins and may support some price growth. Developers, however, are keen to maintain the momentum and thus delay this for as long as possible.
  • Rents remained stable across all submarkets and remain below the pre-pandemic levels. The rental market expected to recover in 2022, as workers may come back to the city and hiring gains momentum.

Outlook: Luxury homes market likely to see growth in 2022

  • The sales resurgence in the high-end market is expected to continue in 2022 as prospective homebuyers’ preferences for larger homes with better amenities remain intact while the interest rates and attractive pricing will keep them motivated to move ahead with their purchase decisions.
  • Developers with a good track record and brand recall will remain the top priority for potential buyers, and existing projects as well as new launches by such players in key submarkets will likely continue to attract keen interest going forward as well.

Note: Bengaluru Residential refers to Bengaluru's prime residential market.

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