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The world has come to terms with the virus. The effects and disruptions of lockdowns that were unavoidable but not wanted are starting to fade away. With the markets open again, the economy is also returning to work. People in the real estate business have benefited from the Covid-19, and the trend will continue in 2022. There has been a rise in all types of real estate prices, but reports say that the luxury market will get a considerable boost in 2022. HNI home buyers are excited about investing in high-end properties.
Last year, the real estate market got off to a good start, but the arrival of the second wave slowed it down a lot. While the country was dealing with a much worse spread of Covid-19 cases, the real estate market had a short-term effect. However, the market quickly rebounded with a new surge in demand. Sales continued to rush through the year, which has helped the segment get rid of much inventory that hasn’t been sold yet.
As early as this year, the Omicron threat came up, and experts thought it would significantly impact the country. They cast a dark cloud over the real estate market. However, luxury real estate wants to keep overgrowing. The number of cases and the lessons learned from the previous waves had prepared the segment, and it has used them to keep the buyer’s trust.
The luxury real estate market had a good year last year, and it is expected that the trend will continue in 2022. In a report by an international realtor, 67 per cent of people who have much money are interested in buying luxury homes. Asked if they wanted to buy a home, 76 per cent said they wanted to, 89 per cent said they wanted to invest in real estate, and 11 per cent said they wanted to buy commercial properties.
Lifestyle Change: This is a significant factor.
During the pandemic, HNIs have been looking for homes with better amenities to live a better life. Those who live in luxury homes are closer to nature and have a “resort-like” feel to their homes. Forty-six per cent of the people who took the survey said that luxury homes are a must in the current situation. Buyers of high-end homes are interested in the health benefits of living in large and green spaces.
HNIs and Millennials who have been to many places want to live in areas that have a very luxurious feel. They are willing to spend much money on luxury real estate because it promises a better life in the city they want to live in.
WFH and hybrid work models: things to think about
Work from home and the hybrid work model have changed the way we work the most. People now use their homes as workstations, and they need big homes that can fit their workstations when required. Surveys say that most forward-thinking companies already use a hybrid or productivity anywhere model. Employees can work from the comfort of their own homes, so luxury homes are becoming more important.
The main reason for investing is to make money.
HNIs are buying second homes to make money, which is why they’re doing it. Around 31% of HNIs think now is a good time to invest in residential real estate because prices are expected to rise again in the second half of the year. Improved market sentiments and a rise in demand will soon impact the prices of things. Investing in high-end residential properties seems like a good idea.
The prices in the country are going up, which is very different from the prices in the developed countries, where prices have almost stayed the same. Investors would love places like the Delhi-NCR, Mumbai Suburbs, and holiday destinations like Goa. These areas have made much money for investors in the past. With more people interested in them, they can once again make money.
Other factors also play a role.
The growth of the real estate market in general and the growth of luxury real estate, in particular, is being helped by several other factors. A report from a well-known financial institution says that the unexpected rise in disposable income, low-interest rates, reduced stamp duties, and other factors have helped the real estate market. This is what the report says.
Thanks to a significant rise in demand for digitisation, many tech workers had a surprise boost. Techies, primarily Millennials, saw an increase in demand, which led to more promotions, higher salaries, and appraisals. This meant that they had more money to invest in real estate. Millennials who have travelled a lot know what luxury is like, so they prefer to invest in luxury real estate projects to help them live a more luxurious life.
Another thing that has pushed the demand for luxury real estate is that people in the startup world have been able to get rich. In the startup world, ESOPs are being used to make money. Many employees use the money they make from their jobs to buy homes because it helps them use the money better and saves them much money in taxes.
The number of people who live in luxury homes will rise in the top seven real estate markets and travel destinations. Buyers in tier I cities would be more likely to choose high-rise apartments. Still, in other cities, they would select low-rise apartments and villas. This would give the luxury real estate market a real boost.
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