Indian consumer trends: Luxury housing boom redefines India’s real estate sector

The average Indian consumer is evolving. With the world on the tip of their hands, ambitions are soaring. ‘Affordable spending’ is still in the DNA, but the desire for luxury is slowly transforming the consumer landscape.

This analysis is reflective of a recent consumption trend. Luxury housing sales (more than $10 million) accounted for 41 per cent of the total housing sales in the first six months of 2024.

This luxury realty boom highlights the desire of an Indian consumer to have a home beyond ‘4-walls’. Real estate developers are also adapting, riding on the rising demand and desire for luxury. Ashwin Sheth Group, a Mumbai-based luxury real estatedeveloper,recently announced new identity and expansion plans across India. The company is also planning to raise an IPO worth $359 million.

‘Markets across segments have evolved significantly. Consumers expect more since their experience is now more global than ever before. Luxury is not about the product per se but about the experience itself. Having multiple checkpoints for consumers to reach out to a brand is also luxury as it elevates the overall experience,' he said.

According to Bhandari, the concept of space has evolved. Owning a bigger space means you have ‘arrived’. When ambitions soar beyond 2 & 3 BHKs and into 5-BHK penthouses, developers must also cater to this rising demand.

Speaking on the rise of ‘Branded Residencies,’ Bhandari highlighted the culture of collaboration with international brands, which allows for offering best-in-line products to match the consumer's aspirations.Another notable shift is the rise in ‘design nuances’, which includes the tech and security of the residence and how safe and grand it is. ‘Triple-height lobbies, one-of-a-kind clubhouses, finishes and amenities in the rooms, all this helps in elevating consumer experience’, Bhandari said.

Regarding the specific government policies that have supported this growth, Bhandari spoke about the RERA (Real Estate Regulatory Authority) Act. It came into effect in 2017 and aims to make the home-buying process more transparent and address the concerns of home buyers and all stakeholders. ‘The RERAregime has been really beneficial. Post-RERA, buyers have more optimism and a sense of security. It has also created a level-playing field and consolidation among industry players.Another major highlight is the rise of real estate beyond regional markets. Post-RERA, consumers are opening up about their demands. Now, one can stay in Mumbai but still buy lucrative properties in Bangalore or any other region’, he said.

No rosy outlook is withoutthorns. Speaking of the challenges, Bhandari highlighted the challenges in expansion, especially in other cities. This calls for more research into consumer behaviour across regions.However, the overall outlook remains positive and growth-oriented as luxury becomes ‘decentralised’.