Luxury Living Redefined: Trends and Innovations in India's Luxury Residential Market

The real estate industry in India is witnessing evolving consumer preferences amid increasing disposable income in a growing economy. Large proportion of youth in the population and their increasing urge to fulfil their aspirational lifestyle is driving rapid changes in the marketplace for aspirational products. The changing consumer behaviour towards aspirational products is evident from the growing sales of high-end products across consumer segments such as electronics, automotive, and real estate. In this blog, we will explore the trends and innovations shaping India's evolving luxury residential real estate market.

Growth in luxury real estate market

Market for residential real estate in India has registered an impressive demand in the last three years. As per the report published by JLL, the annual sale of the residential units increased by 26% in 2023 and crossed the record number of the units sold in a calendar year. One of the major contributors towards this growth in real estate is the luxury segment. According to Mordor intelligence, luxury housing constituted 7% of the overall market share in 2019, which reached 21% in 2024.

Market size of the luxury residential real estate market

Source: Mordor Intelligence

As per the research of Mordor Intelligence, India’s luxury residential real estate market size is estimated at US$ 38.02 billion in 2024, and is expected to reach US$ 101.92 billion by 2029, growing at a CAGR of 21.81%.

Factors driving the shift towards luxury living in India

• Increase in disposable income: Increase in incomes and growing aspirations towards upscale lifestyles have increased demand for modern housing. Owning luxury properties and products is seen as a symbol of success and social standing.
• Growing urbanisation: India's rapid urbanization has significantly contributed to this growth, with more people moving to cities for better jobs, quality of life, and infrastructure.
• Tax impact mitigation: Luxury real estate can be seen as a profitable investment for tax saving. Several unicorn promoters and top management personnels holding stock options can take advantage of tax exemption under capital gains up to US$ 1.20 million (Rs. 10 crore) by investing in luxury properties.
• Pandemic: COVID-19 also played an important role, highlighting the importance of spacious, well-equipped homes and presence of amenities in a gated society, which further fuelled the demand for luxury properties.

Current trends in luxury real estate market

• Sustainable and eco-friendly developments: Sustainability is becoming a priority for luxury home buyers who are increasingly aware of environmental issues and looking to reduce their carbon footprint. Developers are also incorporating green features such as solar panels, energy-efficient appliances and green roofs into their properties.
• IoT-enabled home automation: Smart homes are in the trend that have the ability to remotely control and monitor homes. Innovative technology enhances security and convenience for homeowners. Luxury developers are now incorporating innovative technology features like voice-activated controls, automated lighting, and temperature control into their properties.
• Health and wellness amenities: It is now a key consideration for many luxury home buyers. Examples include dedicated space for yoga and gym, integrating air purification systems and circadian lighting to promote overall health of the individuals.
• Location: Prime location has become increasingly popular among affluent buyers due to different reasons, such as connectivity and easy access to daily utilities. These communities also offer exclusive access to some of the most sought-after facilities and services, golf courses, spas, waterfronts, etc.

Innovations in the luxury living segment

• Sustainable residences: Sustainable residential development focuses on creating homes that minimise environmental impact and emit net zero carbon emissions. These trends emphasise sustainable measures along with luxurious amenities. In 2023, India ranked as the third-highest country in the U.S. Green Building Council's annual list of the top 10 countries and regions for Leadership in Energy and Environmental Design (LEED) certification. In India, 248 building and space projects were certified as LEED-compliant, covering a total of 7.2 million square meters of gross area.
• Construction: Advancements in construction techniques and materials are significantly extending the lifespan of buildings. High quality concrete with modular construction and prefabrication are used nowadays.
  • Innovations such as cross-laminated timber (CLT) provide strong, sustainable alternatives to traditional materials.
  • JumpForm, a type of climbing structure, is specifically designed for vertical concrete buildings, which reduces the time taken for construction.
  • Mivan shuttering technology allows for the swift creation of single floors in concrete. It uses aluminium formwork that ensures speed, strength and durability in building construction. It also enhances structural durability and provides superior finishes, which appeals to buyers.

These methods of construction significantly increase efficiency, helping to complete the project faster and providing timely possession to the home buye

• Focus on privacy and security: Privacy and security have been among the most important factors considered while purchasing a property. Traditionally, security in gated communities included guards at the entrance. Today, luxurious properties offer advanced security measures that include biometric access controls, face recognition systems and 24/7 monitoring by professional security personnel. Additionally, gated communities offer a double layer of security combined with high walls.

Government regulations

• Real Estate Regulatory Authority (RERA): RERA was introduced in 2016 to regulate the real estate market. It has played a vital role in the boom of India’s real estate market. Key positive changes brought in by RERA are:
  • Enhanced transparency
    • Standardised carpet area calculations
    • Eliminating false advertising
  • Promptness in project delivery
  • Mandatory consent for any changes
  • Expediting grievance redressal
• Goods and Services Tax (GST): It contributed to an increase in sales as it has simplified the process by consolidating multiple taxes into a single, unified tax. It has reduced the complexity and costs associated with property purchases. Prior to introduction of GST, buyer of the property had to pay Value Added Tax (VAT) and Service Tax, ranging between 1-5% and 15%, respectively, of the agreement value. However, with the implementation of GST, various taxes have been combined into one single tax of 5% without input tax credit. With improved transparency and standardisation for buyers, property purchasing process has become relatively easier.

NRI Investments

Indians living abroad play a crucial role in shaping the luxury real estate market in India. They are investing heavily in luxury properties, due to their emotional connection to their homeland and the expectation of returning to their home country. The NRIs contributed nearly a quarter of the total residential sales at large developers in FY24, up from 7-10% before the pandemic.

This trend is further fuelled by the ease of conducting transactions and favourable currency exchange rates that makes buying residential property more affordable for NRIs. Their investments not only strengthened the real estate sector but also contributed significantly to the country's economic growth, making 'luxury real estate in India' a globally recognised concept.

Conclusion

India's luxury real estate market has transformed significantly, driven by economic growth, a younger generation with more disposable income, and a greater willingness to take risks. Additionally, Attractive payment plans from developers: To reduce the financial burden of buyers and boost property sales, many developers provide the option to make partial payment. For e.g.: Option of 20/80 payment scheme, where buyers pay 20% upfront and 80% upon possession of the property. These factors have not only redefined what luxury living means but have also made it more accessible to a wider range of people.

Going forward, key trends that will continue shaping the luxury real estate sector in India include:

• Integrating local and global design influences
• Incorporating lavish lifestyle amenities
• Expanding to tier-2 and tier-3 cities
• Adhering to government regulations
• Attracting investments from non-resident Indians

These trends not only cater to the sophisticated tastes of modern buyers but also ensure that luxury living is sustainable and future ready.

In this dynamic environment, that is now defined by limitless imagination and innovation, the idea of luxury real estate in India is becoming increasingly popular, reflecting the aspirations and dreams of millions of people.