When the Trump Towers were launched in Mumbai last year, a lot of people did not assume that it was a part of a trend. It is a well known fact that Mumbai-after all- is the financial capital of the country and the per capita income of the city is far more than any other city in India. But the demand for luxury and exclusive housing accommodations has been on the rise even during the slowdown phase.
The reasons for this can be enumerated as follows.
Changing property trends
When the sale of properties across the country started to fall at the turn of this decade, builders changed tactics and started looking for alternatives to boost sagging profits. The first thing that they started to do was to inculcate the end user requirements into property designs. This resulted in the demand for affordable housing or rented house in bangalore. The other thing that they did was to approach the expat community; offering them world class properties to invest in. This led to the rise of demand exclusive and luxury accommodations.
Bangalore and Chennai markets saw the emergence of such properties. Even though there was a slowdown of sales, exclusive offerings for the expat community were readily available and being purchased. As a result, today one finds that many new projects offering flats for sale in Chennai which actually are single floor accommodations.
Now that the builders have found a market which is sustainable, they have started offering luxury properties in the new projects under development.
Relaxation of FDI norms
Last year, the government relaxed the norms for foreign direct investment in the country. According to experts, the collaborations that would be set up as a result would see fruition in six months to a year. The joint ventures as a result are expected to capitalize on the demand for both affordable housing and luxury offerings.
If one would plan on buying flats in Chennai, the market assessment would reveal availability of villas, penthouses, single floor apartments, duplexes and many other exclusive options. It must be pointed out that this demand for luxury accommodations is relatively new in the country. Hence the foreign collaborators would try and capitalize on the big ticket requirements because of their expertise in creating expansive properties.
Recently, RBI declared a cut in repo rates which eventually would result in increased borrowing from banks. The interest rates would decrease to some extent making it easy for the borrowers to invest in properties. Earlier on, the rising inflation had kept the borrowing rates high leading to a decrease in sales across territories. Now that curb is no longer in place and the investors along with end users can consider borrowing.
This repo rate cut is also indicative of a decreasing inflation and an improved economy. This would allow an increase in the disposable income of end users(who have been the major drivers of Chennai and Bangalore markets). As a result, in the coming times, not only the upper income group would be able to buy flats in Chennai but also would be able to invest in high end properties. This is particularly true when the prices of properties would remain stable for the coming few months.
When one seeks properties on housing.com, the rise in luxury offerings is evident in the new projects.