India’s luxury housing sales rise; what is driving premium real estate demand?

Housing sales in India hit an 11-year high of 1.73 lakh units between January and June, according to a report by global real estate consultants Knight Frank. The luxury housing segment contributed around 41 per cent of the real estate sector's sales growth from January to June. Several factors contribute to this growing demand for luxury housing.

A major factor in the increasing demand for luxury homes is the rise of millennials. According to CoreLogic data, 54 per cent of home purchases were made by millennials.

Urbanisation has also increased the sale of luxury homes in Delhi-NCR, Mumbai, Hyderabad, and Pune. Delhi-NCR sold around 3,300 luxury homes in the first half of 2024, a 13.8 per cent increase from the previous year.

The growth of luxury housing has been contributed by high-net-worth individuals, the purchasing power of millennials, and the desire for luxurious lifestyles.

“The Indian luxury homes market has never been this robust. Besides various factors, the increased preference for such homes is driven by enhanced lifestyle aspirations and the desire to live in iconic addresses developed by reputed builders. As incomes have risen, so have expectations,” said Manoj Gaur, Chairman of CREDAI National and CMD of Gaurs Group.

The ultra-wealthy are not just looking for a place to live; they want a luxurious home that also represents a sound investment with a higher ROI,” he added.

According to a report by Cushman and Wakefield, 61 per cent of new residential projects in Q1 2024 were in the luxury segment.

"In recent years, there has been a significant shift towards luxury housing. Coupled with economic growth and infrastructure development, high-net-worth individuals are seeking spacious, comfortable homes with world-class amenities and aspirational values. Delhi-NCR, especially the Noida Expressway, Greater Noida, and Yamuna Expressway regions, have emerged as sought-after locations," said Yash Miglani, MD of Migsun Group

“The demand for luxury homes in India is driven by a combination of factors—rising incomes, lifestyle aspirations, urbanisation, and infrastructural development, such as the construction of Jewar Airport. This is an exciting time for both buyers and investors in the luxury real estate market,” he added.