The luxury and ultra-luxury residential market in India is set to witness a robust expansion in FY25, driven by the increasing purchasing power of high-net-worth individuals (HNIs) and non-resident Indians (NRIs). This segment's upward trajectory reflects a clear preference for premium offerings such as plotted developments, villas in gated communities, and vacation homes, which are expected to see sustained demand throughout the fiscal year.

Key Drivers of Growth in the Luxury Housing Segment

The past year has already demonstrated a sharp growth in the housing market, with prices rising by 11% in FY24. While this has contributed to stabilising the affordable housing segment, the demand for luxury properties continues to soar. This trend highlights the resilience of the high-end housing market, which remains unaffected by broader economic fluctuations.

• Developers are recalibrating their strategies, focusing on delivering ready-to-move-in properties and ensuring quality with reputed execution capabilities.
• The evolving preferences of buyers have underscored the importance of premium amenities, security, and exclusivity, especially in luxury villas and gated communities.

Expansion in Tier-II and Tier-III Cities

The real estate market in Tier-II and Tier-III cities is expected to expand rapidly, driven by infrastructure development, employment growth, and tourism opportunities. Cities like Amritsar, Ayodhya, and Tirupati are witnessing increased activity as established developers bring their expertise into these emerging markets.

This expansion is not limited to luxury housing; the Build-to-Rent (BTR) segment is gaining traction, particularly among urban investors looking to capitalise on contemporary living spaces and amenities tailored to young professionals and expatriates.

The Rise of Senior Living and Sustainable Homes

The senior living market is poised for exponential growth, reflecting India's aging population and evolving societal norms. Valued at US$ 2-3 billion (₹16,972 – ₹25,458 crore) in FY24, this segment could reach a valuation of US$ 10-12 billion (₹84,860 – ₹101,832 crore) by FY30.

• Senior living developments cater to a niche audience, offering healthcare facilities, community spaces, and safety measures tailored to the elderly.
• As more families embrace nuclear living arrangements, the demand for these developments is expected to skyrocket.

Simultaneously, the adoption of smart and sustainable homes continues to reshape the market. Homebuyers are increasingly drawn to properties featuring eco-friendly materials, energy-efficient systems, and green spaces. These trends underscore a growing awareness of environmental responsibility among urban buyers.

Transforming the Real Estate Landscape

With changing buyer preferences and evolving urban lifestyles, the luxury housing market in FY25 will set new benchmarks for innovation and sustainability. Developers are focusing on smart designs, integrating technology-driven solutions and eco-conscious amenities to meet the demands of an evolving clientele.

This shift is evident across all segments, from the growth of vacation homes among HNIs and NRIs to the emphasis on smart technologies in urban housing developments.

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