Transforming India’s Luxury Real Estate Market: The Unicorn Revolution

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Bhavesh Kothari, Founder & CEO of Property First,

India has recently experienced a surge in the success of its startups, with an impressive number achieving unicorn status, signifying valuations exceeding $1 billion. According to recent data from Hurun India, in 2023, there are now 147 startups valued at over $50 million, a substantial increase from the 122 recorded the previous year.

The rise of unicorns has ushered in a new era of affluence, giving rise to a fresh generation of high-net-worth individuals, including founders, early employees, and investors. These individuals are increasingly inclined to invest in assets that mirror their newfound wealth, with luxury homes emerging as a top choice.

This unicorn boom, fuelled by innovation and entrepreneurial spirit, has not only reshaped India’s economic landscape but has also left an enduring mark on the luxury real estate market.

Startup founders are playing a significant role in driving luxury home sales. Their penchant for upscale homes has created a niche market within the real estate industry, attracting attention from developers and real estate agents alike for such niche properties that offer exclusivity and privacy, besides offering a community of like-minded neighbours.

As more startup founders flock to the luxury real estate market, they contribute to the appreciation of property values in these sought-after societies and localities, making them even more appealing to other high-net-worth individuals.

This shift in buying patterns has led to a remarkable 151% year-on-year increase in India’s luxury housing sales in the first quarter of 2023, as reported by real estate consulting firm CBRE South Asia Pvt. Ltd.

The surge in demand has naturally resulted in price escalation within the luxury real estate sector, with luxury property prices consistently outpacing broader real estate market trends in India. Over the past three years, prices have increased by approximately 60%, with premium residences now typically commanding prices exceeding ₹ 6 crore.

The potential for growth in India’s luxury home sector is undeniably promising, driven by factors such as the growth of ultra-high-net-worth individuals (UHNIs) and high-net-worth individuals (HNIs) globally.

The 2023 World’s Wealthiest Cities Report by Henley Global highlights Mumbai, Delhi, and Bengaluru, collectively boasting 102,200 millionaires, 409 centi-millionaires, and 53 billionaires. According to Knight Frank, the number of HNIs in India is expected to surge by 63% from 2020 to 2025. This surge is fueling a growing demand for ultra-premium housing throughout the country, as affluent individuals seek luxurious residences with state-of-the-art amenities, surrounded by like-minded peers.

Furthermore, as the lifestyle preferences of Indians evolve, there is a growing inclination towards premium amenities, expansive interiors, eco-friendly features and environmental sustainability, all readily available in luxury homes, making them an attractive choice for discerning buyers.

Looking ahead, luxury homes are poised to become increasingly tech-savvy, integrating advanced technologies such as AI-managed smart home systems and energy-efficient homes, all designed to enhance the overall buyer experience. 

 With environmental consciousness on the rise, luxury homebuyers are showing a growing interest in eco-friendly and sustainable properties with features like rainwater harvesting, rainwater recharge, water recycling, maximum use of solar energy, etc. This shift in preferences is leading to the development of environmentally responsible luxury homes.

 Fuelled by increasing demand, evolving buyer preferences, and promising future trends, the outlook for luxury home sales in India is undeniably bright. As the unicorn effect continues to reshape the Indian landscape, it will be captivating to witness how the luxury real estate market evolves to cater to the evolving aspirations of India’s affluent populace. Top developers across the country are definitely in cognisance of this trend and are working towards creating such communities to tap into this niche segment