10 fold rise in Luxury properties in major Indian cities

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Prices of luxury properties in key Indian cities including Mumbai, the national capital region (NCR) and Bangalore have appreciated 10-fold in the past decade, according to a report released on Monday by real estate consultant Jones Lang LaSalle.
Luxury projects yield much higher returns to developers than projects geared towards the affordable and mid-income segments, the report said.
“Because of the tendency of ultra-luxury projects to garner extremely good pre-sale volumes, their developers are generally able to secure significant fund flows to capitalize the completion of their projects,” via report. “While it is equally true that the input costs for luxury housing are also much higher, the developer stands to benefit from the increased visibility of his brand among highly affluent, top-end clients.”
The demand for housing in the luxury segment often outpaces the supply in cities like Delhi, Gurgaon, Mumbai and Bangalore.
“The ultra-luxury housing segment is comparatively recession-proof. As most of the buyers in this category include successful entrepreneurs and business tycoons, their financial appetite is not limited to or governed by the economic considerations,”
“A significant percentage of buyers for such projects is able to self-finance their investments through their saved earnings…the quantum of impact that luxury projects face in times of economic uncertainty is significantly lower when compared to residential projects aimed at other categories,”

Source : http://www.livemint.com/Politics/7AI54G7MxqbtcveNPIhkwO/Prices-of-luxury-properties-in-Indian-cities-rise-10fold-R.html

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