Luxury realty bucks the southward trend

The rich and well-heeled are immune to inflation. Or, so real estate developers in the country would have us believe, citing the pace at which ultra-luxury residential properties are flying off the shelves.

Non-residents homing in thick and fast

Amber Maheshwari, director of real estate consulting firm DTZ, said, "There has been no slowdown in demand for the Rs 2.5 crore-plus homes. People who can afford these homes are from the affluent segments that are not impacted by inflation or higher interest rates."

Low-cost housing, of a high quality

That should be music to the ears of real estate developers catering to the premium luxury segment, for the margins these projects earn are way over those managed by the mid- and lower segment residential projects.

In sharp contrast, mid-segment projects, priced below Rs 1 crore, have seen a slump in both prices and demand. Real estate consultants blame this on the economic conditions, which are eroding the disposable incomes of people.According to a recent study by real estate consultancy Asipac in eight major cities, the average price in the luxury segment has actually increased by 5% to 10% compared with a dip in the prices of mid-segment apartments in the first half of 2008.Amit Bagaria, chairman, Asipac said, "Luxury homes from reputed and established developers have done quite well, and prices are on an upward trend."

A source said NRIs are the biggest drivers for this increase in demand for luxury homes. NRI sales have picked up by 10-15% this quarter.Luxury realty bucks the southward trend Prakash Gurbaxani, CEO and MD, QVC Realty said, "NRIs are investing in Indian realty as they see good value in the Indian realty space going forward."QVC Realty will pump in Rs 1,000 crore in four new projects in the luxury segment - two in Gurgaon and one each in Chikmaglur and Bangalore. It will develop eight million sq ft of area by 2012, with each house priced between Rs 1.64 crore and Rs 4 crore.

"Our focus is on the luxury segment. We have no plans to enter the mid-sized apartment segment now as there is surplus supply there," added Gurbaxani.Another big-ticket project Casa Estebana is being developed by the Koncept Ambience Group in Hyderabad. These are Spanish villas of 8,000-16,000 sq ft each, whose prices have appreciated by 41% in the past 16 months to Rs 7-19 crore. Around 65% of the villas have been sold, and the first phase is slated for completion by September 2009.

Koncept is developing five luxury residential projects in various parts of the country.Lanco Infratech's Rs 8,000-crore mixed-development project, Lanco Hills in Hyderabad, has also allotted 4.5 million sq ft for luxury apartments.S Pochendar, CEO of Lanco Hills, said, "The group plans to invest some Rs 10,000 crore in the next 3-4 years to launch luxury homes in other cities like Chennai."

Several other luxury housing projects, with home prices of Rs 2 crore and above, are in the pipeline. These include Emaar MGF's Boulder Hills (Hyderabad), Prestige Group's Prestige Golfshire (Bangalore) and Jaypee's luxury residential project in Greater Noida.Gated communities have also become very popular in Pune, and are fast gaining popularity in Chennai and Kolkata, too. Still, not everyone's convinced the luxury homes are flying off the shelves as fast as the developers claim.Sailesh Kanani, a research analyst with Angel Broking, said, "The premium products are not being able to sell as expected."