Luxury property sales robust

Despite rising concerns about the economy, one segment of the real estate market remains buoyant: the luxury category. 

”Surprisingly, at a time when economic indicators are not favourable, we sold 15 luxury units valued at over Rs 90 crore this month. Normally I’m happy selling 3-4 luxury units every month,” says Irfan Razack, CMD of the Prestige Group.

Our estimates show that investments of about $1 billion (Rs 5,500 crore) have been lined up for Bangalore’s luxury residential space, to flow in over the next 3-4 years. A dozen luxury launches with over 800 units are expected to happen in the next 3 years.

Amongst ongoing and upcoming projects are the ultra luxurious Prestige Golfshire near Nandi Hills, with units priced at over Rs 6 crore, Skyline’s Villa Maria off Brigade Road priced between Rs 12 and 22 crore, apartments in City View (Four Seasons) coming up near Mekhri circle priced at Rs 4-10 crore, and ultra luxurious flats in Kingfisher Towers at over Rs 22 crore. Nitesh Estates, Sobha Developers, Brigade Enterprises, Embassy, Mantri, Century and several others have ventured into the luxury space.

One reason for the continued robustness appears to be Bangalore’s real estate pricing. “The Bangalore market is not stressed out like Mumbai where prices shot up irrationally impacting property registrations,” says Ashutosh Limaye, head – research & real estate intelligence service in property consultancy Jones Lang LaSalle India.

But some are also beginning to question whether the buoyancy can continue for long, and fear that a bubble may be building up. The weakening in the general sentiment is likely to eventually impact the luxury segment too. The real estate sector was the most impacted in the last crisis.

“The year 2008 had no new issues in the form of IPO/FPO while there was just one issue in 2009,” noted Samantak Das, national head of research at Knight Frank India.