GURGAON: If you were of the belief that selling a luxury or high-end housing unit is more difficult than a middle-income flat in the price range of, say, Rs 30-50 lakh, think again.
According to experts, the primary reason behind this are factors like monthly income, the eligibility and prevailing lending rates on which middle-income buyers are dependent.
On the other hand, as a norm, buyers of premium or luxury housing, those in the bracket of Rs 3 crore and above, tend to be insulated from such considerations by virtue of their existing net worth, explained Santhosh Kumar, CEO-Operations, Jones Lang LaSalle India.
According to market insiders, thought there is a market for both the price brackets, a limited supply of the premium housing units makes them a favourite among buyers.
Investors want to buy something that is limited so that once it is all sold by the builder, then there is a large premium for them in the market, said Sanjay Sharma, managing director, QuBREX.
However, huge projects like Unitech Grande did not (and do not) do well in the market as they are massive projects where investors cannot see the builder exhausting its supply, and this makes it a bad option for the resale market, added Sharma.
The third factor, according to analysts, is that the luxury segment tries to distinguish its products among each other, and hence there is not a simple substitution option for them. In the lower budget homes, there are a lot of similar options from builder to builder in many locations, and with many viable alternatives that a certain single option cannot capture the market. This brings in factors of supply and demand, said Sharma.
Last but not the least, location plays a major role in placing a product on the demand-supply list.
In a place like Gurgaon, land is very expensive. So it is not easy to offer a good location for Rs 30-40 lakh, whereas the premium luxury options can offer much better
locations. So, it is harder to draw people to comparatively poorer locations especially if they are end users, compared to drawing end-users/investors to relatively better locations, said Vikas Arora, of Gauransh Associates, and an ex-employee with several top developers in the NCR.
Nevertheless, selling mid-income housing is easier than high-end or luxury homes since a larger base of the population falls in the bracket.
Sale velocity is higher and the sale cycles are shorter as mid-income housing projects usually sell with 3-4 months of their launch. In comparison, high-end apartments and luxury homes often take more than six months to sell, said Kumar.
A DLF spokesperson added: There are four factors which drive any product in the real estate market location, the product itself, competitive rates and credibility of the builder. If all are in place, from the end-users point of view, there is no difference between the middle-income housing or luxury apartments.
Source:TOI