This Indian City Ranks 6th Globally in Luxury Housing Growth Recent measures such as interest rate cuts and the INR 12 lakh rebate under the new tax regime have made homeownership in this segment more accessible to high-net-worth individuals. With reduced borrowing costs and increased disposable income, buyers are more willing to invest in high-end properties that offer exclusivity and long-term value.

India's luxury housing market is witnessing a surge, with New Delhi making a leap to the sixth position in the global rankings for prime residential price growth, according to Knight Frank's 'Prime Global Cities Index Q4 2024' report. The index, which tracks high-end residential property prices across 44 cities worldwide, revealed a 6.7 per cent rise in luxury home prices in the Indian capital over the past year. This growth is attributed to a confluence of factors, including increased demand from affluent buyers, economic resilience and a growing preference for ultra-luxurious living spaces.

In the previous year's December quarter, New Delhi ranked 16th in the global index. However, a surge in demand from high-net-worth individuals looking for exclusive properties has propelled the city into the top ten. Experts point to India's robust economic performance as a key driver of this surge, with well-endowed buyers investing heavily in real estate as a stable and appreciating asset.

Mumbai, long regarded as India's most expensive property market, also saw growth, securing the seventh position globally with a 6.1 per cent year-on-year (YoY) increase in prime residential prices. The city's luxury housing market remains in high demand, particularly in sought-after neighborhoods where space is a premium commodity. Meanwhile, Bengaluru demonstrated notable progress, moving up from 27th place in Q4 2023 to 13th place in Q4 2024. The city's prime housing segment saw a 4.1 per cent increase in property prices, reflecting growing interest from both domestic buyers and international investors.

"The recent findings from Knight Frank's 'Prime Global Cities Index Q4 2024' reaffirm the strengthening of the luxury housing market, with cities like New Delhi and Mumbai making significant strides," said Mohit Goel, MD of Omaxe Ltd. "This upward trend underscores the robust demand for luxury residences in India's key metropolitan areas. Several factors are driving this growth, including rising affluence among homebuyers, an increasing preference for premium amenities, and the growing influx of global capital into Indian real estate."

Industry experts also highlight the role of favorable policy decisions in stimulating the luxury housing sector. Recent measures such as interest rate cuts and the INR 12 lakh rebate under the new tax regime have made homeownership in this segment more accessible to high-net-worth individuals. With reduced borrowing costs and increased disposable income, buyers are more willing to invest in high-end properties that offer exclusivity and long-term value.

Rahul Thomas, whole-time director of Suraj Estate Developers, emphasized that the luxury market's resilience is evident in global trends as well. "The latest Knight Frank report highlights a steady recovery in the global luxury housing market, with prime residential prices showing a 3.2 per cent annual growth by the end of Q4 2024. This resilience reflects the enduring appeal of high-value real estate, even amid broader economic shifts. For discerning buyers, this presents a meaningful opportunity to invest in homes that offer both exclusivity and long-term value."

Mumbai, in particular, remains a focal point for luxury real estate, with demand fueled by its status as a financial powerhouse and its limited land availability. "As aspirations evolve and lifestyles become more refined, homebuyers are seeking thoughtfully designed spaces that go beyond prestigious addresses," Thomas noted. "They prioritize privacy, high-quality amenities, and a seamless blend of comfort and functionality."

The broader sentiment among real estate developers is that India's luxury housing market is poised for continued growth. Dhaval Ajmera, director of Ajmera Realty & Infra India Ltd, pointed to several underlying drivers of this expansion. "India's luxury housing market is booming, fueled by significant key factors. Increased affluence and disposable incomes are driving a desire for high-end apartments combined with offering comfort, exclusivity, and world-class amenities. Post-budget, with greater discretionary income, many are eager to invest in luxury properties and are willing to pay the premium."

He further explained that land scarcity in prime urban centers like Mumbai, Delhi, and Bengaluru has intensified competition, pushing prices higher. "Limited land availability in these cities further intensifies demand and drives up prices, as these cities are established hotspots for luxury development. Rapid urbanization and improved infrastructure are also important reasons, attracting more people to these cities, particularly the well-connected areas."

Additionally, rising construction costs have contributed to the upward price trend, with increases in material, labor, and land costs. "Finally, growing interest from foreign investors, including NRIs and international clients, is further boosting demand and prices," Ajmera concluded.